In its last quarterly financials prior to consolidation with merger partner Cinergy Corp., Duke Energy reported that first quarter earnings from continuing operations tumbled 37 cents per share to 50 cents/share largely due to a one-time gain in 1Q2005 on the sale of TEPPCO. Quarterly earnings from ongoing operations still exceeded analysts’ estimates by a penny.

The company reported $358 million in net income compared $868 million in net income in 1Q2005. Revenues were $3.2 billion compared to $5.3 billion in the previous year. Duke said the lower revenues were driven by the deconsolidation of Duke Energy Field Services (DEFS) following the transfer of a 19.7% interest in DEFS to ConocoPhillips.

Cinergy Corp., which operated separately from Duke in the first quarter, posted first quarter 2006 ongoing earnings of 62 cents per diluted share, absent discontinued operations and special items, compared to 60 cents from the previous year’s quarter. Reported diluted earnings for first quarter 2006 were 39 cents, compared to 60 cents from first quarter 2005. The two companies completed their merger on April 3 and will report combined results going forward.

“Despite near record mild winter weather, our electric and gas operations delivered solid performances this quarter,” said Duke CEO James E. Rogers. “As we combine the Duke Energy and Cinergy businesses beginning in second quarter, we’re comfortable we will be able to achieve our 2006 employee incentive target of $1.90 per share.” That target should track ongoing diluted earnings per share.

Duke’s electric utility earnings before interest and taxes (EBIT) were $359 million compared to $336 million in the prior year’s quarter. The increase was driven primarily by improved bulk power marketing results, customer growth and lower regulatory amortization, but was partially offset by mild winter weather.

Duke Energy Gas Transmission (DEGT) reported first quarter 2006 segment EBIT of $438 million compared to $411 million in 1Q2005. The increase was attributed to a $24 million gain on the settlement of a customer’s transportation contracts. Absent the special item, ongoing EBIT was $414 million. Positive impacts from business expansion, natural gas processing and a strengthening Canadian dollar were offset by higher operating costs, lower margins at Union Gas due to record warm weather and lower equity earnings related to interest expense.

DEFS reported first quarter 2006 equity earnings of $144 million compared to $919 million from continuing operations in first quarter 2005. The previous year’s EBIT included $770 million in special items concerning the gain on the sale of the TEPPCO GP and the TEPPCO L.P. units and the loss on the 2005 de-designated hedges. Absent special items, DEFS reported ongoing equity earnings of $130 million compared to $149 million in the previous year’s quarter.

Duke’s international division reported segment EBIT from continuing operations of $87 million compared to $68 million a year earlier with the positive results driven by improved prices and volumes in Latin America, favorable currency impacts — mainly in Brazil — and increased margins at National Methanol.

Duke’s real estate business, Crescent Resources, reported first quarter 2006 segment EBIT from continuing operations of $42 million compared to $52 million in the previous year’s quarter.

Other operations, including Duke Energy’s captive insurance company, de-designated hedges resulting from the decision in 2005 to transfer a 19.7% interest in DEFS to ConocoPhillips, and Duke Energy North America’s (DENA) continuing operations, posted an EBIT loss of $85 million in first quarter 2006 compared to a loss of $202 million in first quarter 2005.

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