NEW YORK – Struggling power and gas merchant Dynegy Inc. (DYN) on Friday reported a narrower second-quarter loss, but its collapsed energy trading business and former telecommunications unit continue to drag down results and drain precious cash.
The Houston company reported a net loss of $290 million, or $1.00 a share, compared with a loss of $561 million, or $1.76 a share, a year earlier. Excluding items, losses from continuing operations were 99 cents a share, reflecting continued weakness in Dynegy's primary businesses of producing and supplying power and natural gas-liquids through unregulated markets.
Quarterly revenue fell 23 percent to $1.05 billion. During the quarter Dynegy's trading and marketing business recorded $368 million of losses, including the cost of canceling or writing down power-supply or purchase contracts.
Recently the company announced plans to refinance its bank debts and bonds, avoiding a cash crunch by postponing the due dates on obligations that it currently cannot repay.
Dynegy, which reported $1.7 billion of cash and easily-tapped credit as of July 21, warned 2003 earnings would be lower than previously forecast because of higher debt expenses.
The company also said it is focused on completing its exit from marketing and trading. Dynegy said it reduced debt by $28 million since the end of June.
Dynegy also said energy prices and its production volumes are currently in line with levels it expects to see over the remainder of the year.
Dynegy shares closed Thursday on the New York Stock Exchange at $3.65.