Duke Energy fourth quarter increased by 5 percent as cost cuts offset weak demand

Duke Energy 4th quarter profit rises 5 percent

Power company Duke Energy said Friday that its fourth-quarter profit climbed 5 percent as cost cuts offset continued weak demand for electricity.

Duke, one of the nation’s largest power generators with 4 million customers, said it made $346 million, or 26 cents per share, for the quarter ended Dec. 31 compared with profit of $331 million, or 26 cents per share, in the year ago-quarter. Revenue was flat at $3.1 billion.

Duke, based in Charlotte, N.C., said demand for electricity from industrial customers declined by less than 5 percent — another sign that the economy is beginning to stabilize.

Power companies such as Duke can serve as a proxy for how the U.S. economy is performing because they reflect how much American businesses and individuals are spending on electricity.

The Great Recession has cut demand for electricity over the past two years. As a result, Duke and other power companies have been slashing expenses. Duke said it cut operations and maintenance costs by $150 million last year.

“We are seeing signs of stabilization. It’s too early to tell whether it’s a rebound of any significance,” Lynn Good, Duke’s chief financial officer.

Demand for electricity has been weak from industrial customers in both parts of the country where Duke operates, the Carolinas and the Midwest. Consumption was down by as much as 20 percent earlier in 2009. Overall, industrial sales were off 14 percent during the year.

Good said demand from Duke’s chemicals and metals customers show signs of leveling off after a steep decline. Demand from its textile customers in the Carolinas remains weak, down 8 percent in the quarter.

With much uncertainty in the economy, Good said Duke will continue to focus on cost-cutting in 2010.

For the year, Duke made $1.1 billion, or 83 cents per share, compared with $1.4 billion, or $1.07 per share, in 2008.

Revenue fell to $12.7 billion in 2009 from $13.2 billion in 2008.

Duke shares fell 6 cents to close at $16.15 on Friday.

Shares of power companies did well when the stock market rose in recent months. Duke shares hit a 52-week of $17.94 in December. The stock has been as low as $11.72 in the past year.