Duke Energy Corp (NYSE:DUK)’s second quarter earnings missed analysts’ expectations due to poor commercial sales. On Wednesday, the largest U.S. power provider reported second quarter profit of 48 cents a share or $339 million. The company had earned 99 cents per share or $444 million in the corresponding period last year. Excluding one-time charges related to the failed Florida nuclear power project, the company posted net income of 87 cents a share.
Revenues for the quarter climbed from $3.58 billion to $5.88 billion as the acquisition of Progress Energy last year boosted results, helping it beat revenue estimates. Analysts polled by Thompson Reuters were expecting 94 cents a share in earnings and $5.73 billion in revenues.
Sales to corporate clients weak
Duke Energy Corp (NYSE:DUK) has been struggling this year due to weak sales to corporations. Sales were also affected by mild weather that limited electricity usage. Duke Energy Corp (NYSE:DUK) generates electricity through natural gas, coal and nuclear plants, says Ernest Scheyder of Reuters. Duke Energy Corp (NYSE:DUK) CEO Lynn Good said in a statement that sales to large corporate clients affiliated to the wholesale distributor PJM Interconnection have been weak.
In a PJM Interconnection auction, wholesale prices plunged this year to as low as $16/megawatt hour from $110/megawatt hour last year due to overcapacity. It affected Duke Energy Corp (NYSE:DUK)’s earnings most. However, CEO Lynn Good said that it was temporary as wholesale prices are expected to rise to $126/megawatt hour next year. She expects prices to increase through 2015 and then moderate.
Duke Energy full year guidance
Despite missing the forecasts, Duke Energy Corp (NYSE:DUK) maintained its full year earnings guidance of $4.20 to $4.45 per share, in line with the consensus estimate of $4.33. Lynn Good remains optimistic as North Carolina and Ohio approve the rate increase requests. The company also expects to generate more costs savings from the $18 billion merger with Progress Energy last year.
Duke Energy Corp (NYSE:DUK) said it has resolved its short-term priorities, and the company is now positioning for the long-term. Duke Energy Corp (NYSE:DUK) shares went down 0.51 percent to $70.76 at 11:47 AM EDT.