A hot summer which boosted electricity use, and increases in itsEnergy Services division led Duke Energy’s 42% increase in 1998third quarter basic earnings which registered $423.8 million or$1.18 per share, up from $298.4 or 83 cents per share for the samequarter in 1997.
Overall earnings before interest and taxes (EBIT) for the thirdquarter of 1998 were $870.9 million versus $632.2 million for 3Q1997. Subtracting the difference due to special items – a $39million non-recurring gain for Texas Eastern Transmission in 1998and a $46.8 million non-recurring charge taken during last year’squarter – still left the company with a respectable 14% increase inbasic earnings.
There were two main factors in the earnings increase, Duke said.In Electric Operations, overall electric sales rose 7.8% versuslast year. In Energy Services, EBIT rose 110% from last year’squarter. In that unit, improved results from Duke Energy’s GlobalAsset Development and Duke Energy Trading and Marketing more thanoffset lower margins posted by Duke Energy Field Services due tolower natural gas liquids prices.
“During the third quarter, we continued to execute our strategyto develop regional centers of energy assets. We also leveragedDuke Energy’s strong, diverse portfolio of assets,” said ChairmanRichard B. Priory. “In the energy business, many external forcescan affect revenues. The diversity of our portfolio provides someoffsets so that negative factors for one line of business can bepositive for another.”
The $39 million Tetco gain, based on resolution of a gas supplyrealignment costs issue, helped put EBIT at Duke’s gas transmissionoperations at $177.7 million, up 32% over $134.6 million for lastyear’s quarter. Tetco also received approval from FERC in the thirdquarter for its Customer Rate Initiative plan that will reducecustomer rates and will make the pipeline more competitive in thefuture.
In Electric Operations, which serves nearly 2 million customersin the Carolinas through Duke Power, EBIT for the quarter was$590.5 million versus $453.6 million for 3Q 1997.
In Energy Services, EBIT for the quarter was $78.8 millioncompared to $37.5 million reported for last year’s quarter.Although lower natural gas liquids prices resulted in lower marginsfor Duke Energy’s Field Services, other business units showedbetter results.
Duke Energy Trading and Marketing helped by favorable marketconditions, posted EBIT of $31.6 – versus a loss of $5.4 millionfrom last year’s third quarter.
For the nine months ending Sept. 30, 1998, Duke Energy earned$2.81 per share, up from the $2.10 per share reported for the sameperiod in 1997.
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