After enduring a 71% drop in profits in the third quarter, Duke Energy Corp. announced it will cut 1,500 regular positions and 400 contract employees. Although the company’s chairman, Richard Priory, said the move will save $100 million a year, Duke Energy’s shares fell 4.4%, or 88 cents, after the announcement, to $19.26.
The cuts come amidst a series of investigations into its business practices concerning so-called round-trip trading, in which an equal amount of electricity is bought and sold at the same price. Such trades inflate revenue and trading volume. The company investigated more than 750,000 trades beginning in January 1999 and discovered 61 round-trip trades.
Duke’s earnings statement has also been subpoenaed by the Commodity Futures Trading Commission and by a federal grand jury.
The company says it expects earnings in 2003 to be about the same as 2002.