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Duke Energy reports a fall in second-quarter profit

Duke Energy’s profits in the second quarter fell from the same period a year ago because of an accounting charge related to its assets in Guatemala, part of the Latin American business it’s exiting.

But Duke said the quarter was strong strategically, meaning the company’s on track with its pending acquisition of Piedmont Natural Gas, the sale of its international business and its continued investments in initiatives like renewable energy and gas generation.

In a call Thursday morning, Duke Energy CEO Lynn Good said the Piedmont deal is expected to close by the end of this year, and the sale of the international business would occur sometime in 2017.

“The successful completion of both transactions will align our portfolio to focus on domestic infrastructure businesses that drive more stable earnings and cash flow growth,” Good said in a statement.

The Charlotte-based utilities company said in a securities filing Thursday that earnings totaled $509 million, or 74 cents a share, for the three months ending June 30, falling 6.3 percent from $543 million, or 78 cents a share, from the second quarter last year.

One-time costs weighing on second-quarter earnings included merger-related costs, cost-savings initiatives and an impairment charge of $145 million related to business in Central America.

Steve Young, Duke’s chief financial officer, said the company doesn’t expect to see an accounting charge like that again, and that the overall value of the Latin American assets as whole remain consistent with what it’s seen in the past.

Excluding those costs, earnings were $1.07 a share, up from 95 cents the same period a year ago. That adjusted figure beat the $1.01 estimate of analysts surveyed by Zacks Investment Research.

Revenue for the second quarter totaled $5.48 billion, dropping almost 2 percent from the $5.59 billion from same time a year ago.

Duke Energy announced in February that it’s selling its international business. That sale, the company has said, would become part of a move away from investments with uncertain returns toward the safety of more predictable regulated businesses.

Duke’s $4.9 billion acquisition of Charlotte-based Piedmont Natural Gas, announced in October, is intended to put together a growth platform around natural gas, Good said. Piedmont’s headquarters will remain the Piedmont Town Center, and its team will lead gas operations for the combined company. The two companies are awaiting approval from the N.C. Utilities Commission on the deal.

“People are just waiting for them to get rid of the international business, close the Piedmont acquisition and just become a cleaner story ... where almost all the earnings will be generated by regulated utilities and basically renewable investments,” said Andy Smith, a utilities analyst for Edward Jones.

Duke has about 5,500 employees and contractors in multiple buildings in downtown Charlotte, spokesman Tom Williams said. Management did not elaborate on how the pending Piedmont deal would affect overall employment figures.

Katherine Peralta: 704-358-5079, @katieperalta

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