Duke, Progress Energy, Constellation Energy Report 1Q Losses

MarketWatch is reporting that Duke Energy’s net income is down 26% and that Progress Energy has earnings down 18%. Additionally, both MarketWatch and The Wall Street Journal commented on Constellation Energy’s first quarter report, which MarketWatch described as a swing “to a first-quarter loss of $123.5 million, or 62 cents a share, after earning $145.7 million, or 81 cents in the year-earlier quarter.”

Duke Energy announced first quarter 2009 adjusted diluted EPS of 28 cents, compared to 35 cents for first quarter 2008. Reported diluted EPS for the first quarter 2009 was 27 cents, compared to 37 cents for the same period last year.

The quarter’s results were impacted primarily by two items: lower sales to the industrial customer class due to the continuing global recession, and increased operating and maintenance expense due to significant winter storms in the quarter.

“Despite the effects of the recession and storm-related expenses, our businesses remain fundamentally strong,” said James E. Rogers, chairman, president and chief executive officer. “We can’t control the weather or the economy so we’re focused on issues we can control: managing our costs, improving operational performance, maintaining our liquidity, and making progress on our regulatory and legislative initiatives. After the first quarter, we are on track to achieve our 2009 employee incentive target of $1.20 per share on an adjusted diluted basis. But, of course, the third quarter is usually the most significant for our company.”

Progress Energy announced first-quarter GAAP earnings of $182 million, or $0.66 per share, compared with GAAP earnings of $209 million, or $0.80 per share, for the same period last year. First-quarter ongoing earnings were $182 million, or $0.66 per share, compared to $148 million, or $0.56 per share, last year. The significant drivers in ongoing earnings per share were increased wholesale revenues, favorable AFUDC equity and a return to normal weather, which were partially offset by share dilution, increased interest expense and lower retail growth and usage.

“In the midst of this economic slowdown, we delivered solid financial results in the first quarter by living within our means and aggressively managing our business,” said Bill Johnson, chairman, president and CEO.

Progress Energy affirms its 2009 ongoing earnings guidance range of $2.95 to $3.15 per share.

Constellation Energy reported adjusted earnings of $0.74 per share for the first quarter of 2009, compared with adjusted earnings of $0.95 per share in the same period last year. Adjusted earnings exclude the cumulative effects of changes in accounting principles, discontinued operations and special items (which are defined as significant items that are not related to our ongoing, underlying business or which distort comparability of results). On a Generally Accepted Accounting Principles (GAAP) basis, the company reported a loss of $0.62 per share, compared with earnings of $0.81 per share in the first quarter of 2008. Year-over-year GAAP results were driven by one-time negative impacts primarily associated with divestiture activities, merger termination and strategic alternatives costs and impairments related to the company’s equity investment in Constellation Energy Partners (CEP) and their nuclear decommissioning trust funds.

Constellation Energy reaffirmed earnings guidance for 2009 of $2.90 to $3.20 per share and for 2010 of $3.05 to $3.45 per share.

“Our core businesses continue to deliver strong results in a challenging economy,” said Mayo A. Shattuck III, chairman, president and chief executive officer of Constellation Energy. “As expected, the de-risking activities and strategic realignment that we began in August 2008 drove one-time GAAP losses in the quarter. As we work steadily through this transitional year, it’s important to differentiate our operational performance from the impact of one-time losses. Our strategic realignment is on track.”

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