Earnings Preview: Duke Energy to post 4Q results

NEW YORK (AP) -- Duke Energy Corp. has been tying up some large financial loose ends in recent weeks. Now investors are ready to focus on how well Duke generates and delivers electricity.

Duke, the nation's largest electric utility, will report fourth-quarter financial results on Wednesday.

Investors have been concerned about three big issues for Duke: An investigation into boardroom maneuvering by North Carolina regulators, how much the company would have to pay for a new coal plant in Indiana that has gone far over budget, and whether the company would try to fix a broken nuclear plant in Florida.

All three issues have been resolved in recent weeks. In December the company reached a settlement with North Carolina regulators over surprise executive changes in the hours after Duke's merger with Progress Energy was completed last summer. Duke CEO Jim Rogers will retire by the end of this year as part of the settlement.

Also in December, Indiana regulators approved a settlement about payment terms for the over-budget coal plant. Customers will pay $2.6 billion and Duke will absorb $900 million. The plant was originally supposed to have cost $1.9 billion.

And earlier this month Duke announced it would close the crippled Crystal River nuclear station in Florida rather than spend as much as $3.4 billion to try to repair it. The plant has been shut since 2009 when part of its structure cracked during maintenance.

"It'll give them a fresh start," says Andy Smith, an analyst at Edward Jones.

WHAT TO WATCH FOR: Investors will want to know how Duke plans to grow revenue and profit when demand for electricity has flattened because of a sluggish economy and energy efficiency improvements. The company is in the process of asking regulators in the Carolinas to approve higher rates, and Duke will likely try to devise a plan to add a new power plant to replace the Crystal River plant in Florida.

Investors will also want an update on the search for a new CEO to replace Rogers.

WHY IT MATTERS: Duke is the largest utility in the U.S. by market value and number of customers. It serves 7 million customers in six states. Because electricity demand rises with economic activity, the company's results can reflect changes in the broader economy.

LAST YEAR'S QUARTER: In the fourth quarter of 2011 Duke's earnings fell 33 percent because mild temperatures reduced demand for electricity and heavy storms increased the cost of repairs. The company posted net income of $288 million, or 22 cents per share, on revenue of $3.37 billion.

WHAT'S EXPECTED: Analysts polled by FactSet expect Duke to earn 65 cents per share, on average, excluding the effect of one-time charges. Analysts estimate the company will post revenue of $5.26 billion. The results are not comparable with last year because the company had not yet completed its acquisition of Progress Energy.

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