Power company Duke Energy posted lower fourth-quarter earnings on Tuesday due to higher settlement reserves and the impact of merger and restructuring activities.
The company, which merged with fellow power company Cinergy last April, earned $387 million, 31 cents a share, down from $606 million, or 63 cents a share, a year earlier.
Excluding special items, earnings were 43 cents a share, unchanged from the fourth quarter of 2005. Analysts on average were expecting the company earn 40 cents a share, according
to Thomson Financial.
Results were helped by additional earnings from the former Cinergy operations and income tax benefits. Those were offset by the sale of 50% interest in its Crescent Resources unit last September, lower earnings from Crescent and the issuance of additional shares related to the Cinergy merger.
The company's franchised electric and gas arm posted a more than 50% jump in earnings before income tax, mainly driven by the addition of Cinergy's regulated utility operations in the Midwest and less storm related expenses.
But Duke's natural gas transmission unit posted lower results due to higher operating and maintenance expenses.
The field services business segment saw a decline in contributed equity earnings, as lower commodity prices pushed down results.
The company's commercial power segment narrowed its loss versus the year pervious results, when it took a contract termination charge.
But the international energy arm swung to a loss, due to a previously disclosed recognition of a $100 million litigation reserve stemming from a contract dispute of its former gas unit with Citrus Trading Corp. and a $28 million impairment charge related to the sales of its Bolivian assets.
Results from Crescent Resources plunged to $17 million from $104 million as Duke changed its ownership from 100 percent to a 50-50 joint venture partnership with Morgan Stanley Real
Estate Fund in September of 2006. Lower property and land sales also hurt earnings before income tax.
Duke, one of the largest electric power companies in the United States, supplies and delivers energy to 3.9 million customers. It has nearly 37,000 megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky.
Duke spun off its its natural gas unit, now trading as Spectra Energy, to its shareholders in January 2006.