Duke Energy missed analysts earnings estimates for the fourth quarter and full year, posting earnings per share (EPS) of 35 cents and $2.64, respectively, compared to average Wall Street consensus estimates of 45 cents for the fourth quarter and $2.74 for the year. In 4Q2000, the company posted EPS of 47 cents and for the full year it posted $2.10. Lower commodity prices hindered growth in Duke’s field services operations and mild weather hurt results from the company’s North Carolina utility company. Based on the results, Credit Suisse First Boston analyst Curt Launer said he was lowering expectations for this year from $2.85 to $2.75/share. Duke’s stock price was down nearly 3% by mid-day on Thursday after its announcement. However, Duke’s marketing and merchant power operations performed well and are expected to showed continued strong growth this year. In addition, the company is buying Canadian pipeline giant Westcoast Energy. “Despite all of the turbulence in the industry, it was our best year ever,” said CEO Richard Priory, noting a 26% increase in ongoing earnings per share before special charges in 2001. Non-recurring items, however, brought earnings per share gains down to only 2.5%, and the company’s fourth quarter was particularly difficult with diluted earnings per share after special items down 26% to 28 cents. Priory said the company’s balanced energy portfolio led to full-year improvements. Marketing and trading operations, merchant power and Duke’s other unregulated businesses showed earnings growth of 127%. Before special items, the company posted record earnings of $2.64/share compared to $2.10 in 2000, but short of the $2.74 average of analysts’ estimates. Including non-recurring items, Duke posted $2.45/share in 2001 compared to $2.39 in 2000. Net income for the year rose to $1.9 billion from $1.8 billion in 2000. Revenues for 2001 grew 21% to $60 billion. Fourth quarter net income fell to $225 million from $284 million.

Driven by record 52% growth in 2001 — with generous support from its general partner — Kinder Morgan Inc. (KMI) reported it expects to have 10-15% growth through the year. Earnings were driven “significantly” by KMI’s ownership of the general partner of Kinder Morgan Energy Partners LP (KMP), which saw its earnings grow 59% from a year earlier. KMI reported 2001 diluted earnings per share of $1.96 compared with $1.29 for 2000. For the fourth quarter, equivalent earnings were up 40% to $0.60 per share, compared with $0.43 for the fourth quarter of 2000. Overall, KMI reported diluted earnings per share of $1.97 in 2001, up from $1.61 in 2000, and $0.60 for the fourth quarter, compared to $0.74 a year earlier. Most of KMI’s earnings were driven by ownership of the general partner of Kinder Morgan Energy Partners LP (KMP), the largest master pipeline master limited partnership in the United States. KMI will receive $272.4 million in total distributions from KMP for 2001, up 82% over 2000, and $73.5 million in total distributions from KMP for the fourth quarter, up 65% from the same period a year earlier. As KMP’s cash flow grows, Kinder said KMI’s general partner share will also grow. Natural Gas Pipeline Company of American (NGPL), a KMI subsidiary, reported segment earnings of $346.4 million in 2001, slightly higher than 2000, and $88.6 million for the fourth quarter. Kinder said “transportation and storage capacity remains virtually sold out on the pipeline and management continues to successfully re-contract capacity and enter into contracts for new electric generation load.” He said NGPL expects to connect between 3,000 and 4,000 MW of incremental gas-fired electric generation capacity a year through 2004.

Reflecting strong operating results from its utility subsidiaries, Consolidated Edison Inc. (Con Edison) reported 2001 net income of $682.2 million or $3.22 per share, compared with earnings of $582.8 million or $2.75/share for 2000. The company clarified that earnings for 2000 included non-recurring charges of $162 million, or $0.49 a share, for nuclear replacement power and merger-related costs. Excluding these charges, 2000 earnings would have been $3.24 a share. The company said earnings for 2001 reflect electric rate reductions for Con Edison of New York consumers, which took effect Oct. 1, 2000 and April 1, 2001 in accordance with the company’s 1997 and 2000 regulatory agreements. Despite the reductions, Con Edison said they were largely offset by the impact of warmer than normal summer weather, increased pension credits and lower operating costs. After excluding the effects of weather, electric sales for Con Edison of New York — a utility subsidiary of Con Edison — reported an increase of 2.4% for 2001 when compared to the prior year, and firm gas sales increased by 2.8%. The company noted that its unregulated businesses contributed $0.05 a share to earnings in 2001, compared with $0.04 cents in 2000. “Our shareholders benefited from a solid 11% total return in 2001,” said Joan S. Freilich, executive vice president. “Today’s increase in the dividend, the 28th consecutive annual increase, reflects our confidence in the company’s future.” The company also posted strong net income in the fourth quarter of 2001. For the quarter, Con Edison had net income of $125.1 million or $0.59 a share, compared with $46.1 million or $0.22 a share for the fourth quarter of 2000. Excluding the non-recurring charges, earnings per share for the 2000 quarter would have been $0.53 a share.

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