Duke Energy says sale of commercial solar and wind businesses signals a 'new era'
Duke Energy executives say the company is now in a "new era" after it sold off its two unregulated commercial renewable energy businesses last month. That leaves Charlotte-based Duke as a fully regulated company poised to grow revenues and profits, Chief Financial Officer Brian Savoy said.
"I believe it is a new era for Duke," Savoy said in an interview Thursday. "What we see in front of us is, you know, significant growth in the Carolinas. I mean, population growth, new industries coming into our area … because it's a great place to do business. And that provides opportunities for us to invest and grow, grow the company for our customers and our investors."
He spoke as Duke Energy announced a slight decline in profits for the third quarter, to $1.2 billion, compared with $1.38 billion a year ago. Adjusted for one-time items, Duke earned $1.94 per share, which beat Wall Street analysts' estimates. Duke benefited during the quarter from price increases and a lower tax rate.
Savoy said the company has continued cost-cutting to make up for mild weather and lower electricity usage, especially among commercial customers. He said Duke has cut about $200 million so far this year, by delaying planned plant outages and other projects, and trimming discretionary spending, including consulting costs and travel.
During the quarter, Duke's tax rate fell to 2.8%, from 10% a year ago.
In recent weeks, Duke sold its commercial solar and wind farm business to Brookfield Renewable for $2.8 billion and its commercial rooftop solar business to Boston investment fund Arclight Capital Partners for $364 million. Savoy says Duke will use the money to help avoid debt as it spends on new power plants and transmission lines. Altogether, the two units have about 560 employees, all of whom kept their jobs under the new ownership.
Savoy has said the company hopes that spinning off the unregulated businesses will make Duke's stock more attractive to investors.
In a news release Thursday, CEO Lynn Good said the company sees growth ahead as a fully regulated utility in the Carolinas, Florida and the Midwest.
“As we execute our $65 billion five-year capital plan — one of the largest in our industry — our long-term organic growth strategy has never been more clear. Our attractive dividend yield, coupled with long-term earnings growth from investments in our regulated utilities, has us well positioned to deliver sustainable value and earnings growth of 5 to 7% over the next five years,” Good said.
On Oct. 23, Duke announced a regular quarterly dividend of $1.025 per share, payable Dec. 18 to anyone owning shares as of Nov. 17. That's unchanged from the second quarter.