Duke Energy profit beats as power demand, rates rise

Adjusted profit $1.17/share vs est. $1.12; Operating revenue rises 12 pct to $6.62 bln.

Duke Energy Corp, the largest U.S. power company by market value, reported a better-than-expected adjusted profit for the second straight quarter as a particularly harsh winter boosted power demand.

The company, which derives more than 80 percent of its revenue from utilities whose rates are set by state regulators, also benefited when North Carolina, South Carolina and Florida approved its request to raise rates last year.

Duke Energy's operating revenue from regulated electric utilities rose 14 percent to $5.58 billion in the first quarter ended March 31.

The company, like other utilities, is looking to shield itself from volatile prices for power sold on the open market and said in February it would sell its Midwest commercial generation business.

The company took a $1.4 billion charge on Wednesday to write down the value of the Midwest commercial generation business.

Excluding the charge, first-quarter profit was $1.17 per share, above the average analyst estimate of $1.12, according to Thomson Reuters I/B/E/S.

Duke is selling 11 plants in Ohio and one each in Illinois and Pennsylvania.

Charlotte, North Carolina-based Duke has about 57,500 megawatts of electric generating capacity and supplies power to 7.2 million customers and gas to 5 million customers.

The company's customer base is second only to that of Exelon Corp, which said last month it would buy Pepco Holdings Inc for $6.83 billion, bumping up its number of customers to 10 million.

Duke itself completed a $13.7 billion purchase of Progress Energy Inc in 2012.

"For the third consecutive quarter, we experienced improved economic growth throughout our service territories," Duke Chief Executive Lynn Good said in a statement.

The company backed its adjusted earnings forecast of $4.45-$4.60 per share for the full year.

Duke, which uses coal, natural gas and nuclear plants to generate electricity, struggled with tepid power sales after the recession of 2008 as customers cut spending.

The company posted a net loss of $97 million, or 14 cents per share, in the first quarter, compared with a profit of $634 million, or 89 cents per share, a year earlier.

Total operating revenue rose 12 percent to $6.62 billion, beating the average analyst estimate of $6.44 billion.

Duke shares have risen 6 percent this year. They closed at $73.07 on Tuesday on the New York Stock Exchange, valuing the company at $51.66 billion.

Reporting by Swetha Gopinath