Duke Energy Corp.'s third-quarter net income tumbled 30 percent, the company said Thursday, with energy consumption falling at the same time that costs rose unexpectedly for a new plant in Indiana.
While this summer had its heat waves, it was not as steamy as last year and consumers did not use their air conditioners as much, the company said.
Duke, however, said that that there is growing demand from its commercial and industrial customers and earnings topped Wall Street expectations.
The Charlotte, N.C.-based power company, the biggest utility in Indiana, posted earnings of $472 million, or 35 cents per share, for the three months ended Sept. 30. That compares with $670 million, or 51 cents per share, for the same part of 2010. Revenue was flat at $3.96 billion.
Excluding special costs including overruns for its controversial coal-gasification plant in Edwardsport in southwest Indiana, Duke's adjusted earnings were 50 cents per share.
Analysts, who typically exclude special items, expected a profit of 47 cents per share on revenue of $4.11 billion, according to FactSet.
Shares rose 25 cents, to $20.68 each, in midday trading.
The terrible economy has dragged down power usage both in homes and at industrial locations.
Duke Chairman and CEO Jim Rogers said Thursday in an interview that he sees little change in that regard going forward.
"It's hard to envision how unemployment levels drop over the next year or so," Rogers said.
Duke Energy International did see strong results from its Latin American operations and increased earnings from its stake in National Methanol Co.
The cost of building the Edwardsport coal gasification plant in Indiana continued to rise above estimates, however. Duke said its current cost estimate for the project is $2.98 billion, up from original estimates of $1.87 billion and the $2.72 billion cost cap that it proposed. Duke took a $220 million impairment charge in the quarter to account for the higher costs.
Regulators are holding hearings this week on the plant's costs.
Duke Energy Corp., which already serves 4 million electric and gas customers in the Carolinas, Kentucky, Indiana and Ohio, will become the largest U.S. utility if it closes on a deal to buy Progress Energy Inc., based in Raleigh, N.C. The deal is expected to close by the end of the year, although state and federal regulators have yet to approve it.
Progress has more than 3 million retail electric customers and operates in the Carolinas and Florida.