Duke Energy hit its 2013 earnings target on the strength of its merger with Progress Energy, higher customer rates and a strong finish to the year.
Profits of $2.7 billion for the year earned $3.76 a share, compared with the $1.8 billion and $3.07 a share in 2012, Duke said Tuesday.
Adjusted for one-time items, earnings were $4.35 a share, at the midpoint of Duke’s target range and ahead of analysts’ estimates. That’s up from $4.32 a year ago.
Revenue growth for the year was boosted largely by Duke’s mid-2012 merger with Progress Energy, which added territory in the eastern Carolinas and Florida.
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CEO Lynn Good said five rate case settlements in Duke’s six-state territory helped the year’s earnings, along with modest (0.6 percent) but steady growth in electricity demand and better-than-expected merger savings. Nonfuel operations savings were 9 percent, beating the expected 5 to 7 percent.
For the fourth quarter, Duke’s reported earnings of 97 cents a share beat the 62 cents of a year ago. Adjusted earnings were $1, compared with 70 cents last year.
“We were forecasting a stronger third and fourth quarter as a result of some of the regulatory approvals, and we were able to close strongly,” Good said.
Lower operating and maintenance costs, including a new formula that spreads out nuclear-outage costs in the Carolinas and merger savings, added 20 cents a share to fourth-quarter results. Higher rates contributed 12 cents.
Duke set 2014 adjusted-earnings targets of $4.45 to $4.60 a share and extended its outlook of 4 to 6 percent average annual growth through 2016.
In 2014, said Chief Financial Officer Steve Young, Duke expects to benefit from a full year of rate increases, an uptick in wholesale revenue and a return to normal weather that boosts sales.
Duke expects to take a pre-tax charge of $1 billion to $2 billion in the first quarter this year as it begins marketing its interest in 13 commercial power plants in the Midwest.
The sale announcement Monday followed Ohio’s denial last week of a new pricing mechanism. Good said volatile competitive markets and uneven profits made the decision to sell “more of a strategic one. Over the long term, we don’t see a strategic fit of these assets.”
Duke said Tuesday that it will also explore investing in natural gas pipeline projects to supply its gas-fired power plants.