(Adds details, interim CFO, analyst comment, share price)
By Karolin Schaps
LONDON, Nov 20 (Reuters) - Britain’s largest energy supplier, Centrica, cut its full-year earnings outlook on Thursday on the back of a steep drop in energy demand due to mild weather and the extended outage of two nuclear power plants which it partly owns.
The utility reduced its adjusted earnings per share forecast for 2014 to 19-20 pence, compared with 21-22 pence previously expected, and warned that its upstream business would be hit if oil and gas prices stay low for much longer.
“We will likely spend less on finding gas as commodity prices come down,” said interim Chief Financial Officer Jeff Bell on a conference call to journalists.
The company’s 2015 upstream capital expenditure is expected to fall to 900 million pounds from 1 billion pounds this year.
Despite its earnings downgrade for this year, Centrica was more upbeat about the coming year, saying a return to normal weather conditions in Britain and North America would lead to earnings grwoth in 2015.
The utility also said it had started signing up new customers in Britain in recent weeks through a new tariff it launched in partnership with supermarket chain Sainsbury’s .
A 21 percent drop in residential gas demand over the first 10 months of this year due to mild weather is expected to reduce average consumer dual fuel bills by around 100 pounds this year, Centrica said.
The utility and its peers have been under political pressure to cut prices following a steep increase in energy bills in recent years.
The energy supply sector is the subject of an inquiry launched in June by the competition watchdog, following a referral by energy regulator Ofgem on the grounds that it thought parts of the sector were not competitive enough.
“We still think Centrica remains well placed, being financially sound, with strong cash generation, and with the negatives already reflected in the current low rating,” said Angelos Anastasiou, utilities analyst at Whitman Howard, who recommends buying the stock.
Shares in Centrica were trading down 1.5 percent at 0816 GMT. (Editing by Jason Neely and Susan Fenton)