HOUSTON – Energy marketing and trading giant Enron Corp. on Tuesday posted better-than-expected first-quarter earnings on increases in revenues, wholesale trading volumes and retail energy services contracts, and boosted its earnings target for the year.
The Houston-based company, North America's largest gas and electricity marketer, reported first-quarter earnings per share of 47 cents per share, compared to year-ago per-share gains of 40 cents. The 2001 figure excluded a two-cent per share gain related to a non-recurring accounting change.
Net income, excluding $19 million related to the accounting change, rose 20 percent to $406 million from $338 million in the year-ago quarter.
Wall Street analysts polled by Thomson Financial/First Call had expected Enron, which also has broadband Internet and telecommunications businesses, to earn 45 cents per share.
Enron raised its 2001 earnings target range by five cents, to $1.75-1.80 per share. In January, the company said it expected to earn $1.70-1.75 per share.
Revenues nearly tripled year-over-year, from $13.1 billion in first quarter 2000 to $50.1 billion this year.
Bullish markets for Enron's primary arenas of power and gas pushed the surge in trading volumes, the company said.
Total electricity volumes more than doubled to 232 million megawatt hours from 111 last year. Natural gas trading increased by 55 percent, up to 36.4 trillion British thermal units (tBtu) from 23.5 tBtu in 2000.
``Enron's wholesale business continues to generate outstanding results. Transaction and volume growth are translating into increase profitability,'' Enron president and chief executive officer Jeff Skilling said in a statement.
EnronOnline, the biggest online trading platform in the world with $525 billion in gross transaction volumes since inception in 1999, contributed to the growth, the company said.
Enron's retail energy management business, Enron Energy Services notched a 59 percent increase in contracts to $5.9 billion from $3.7 billion a year ago. It now manages heating, air conditioning, lighting and other energy costs to major companies at 31,000 properties with more than 3.1 billion square feet.
The division's net income exploded with a more than fivefold increase, from $6 million in the first quarter of 2000 to $40 million in this year's comparable period.
Enron's nascent broadband Internet business reported a loss of $35 million in net income, compared to a break-even first quarter in 2000. The bandwidth trading unit recorded 580 transactions in the first quarter, compared to 321 in all of last year.
Enron had suffered some setbacks during the first quarter, including the dissolution of its marquee video on demand deal with Blockbuster Inc., the trimming of 20 percent of its broadband unit's staff and continuing payment problems with the Dabhol Power Plant in India.
The wave of bad news prompted president and chief executive officer Jeff Skilling to hold a mid-quarter conference call to soothe investor concerns after the stock dropped into the $50s, its lowest level since January 2000 and well off its high of $90.56 last August. The stock closed at $59.44 on Monday.