TXU reports 3Q income down 7.5%

TXU reported third quarter net income of $328 million or $1.25/share on fewer shares down from $361 million or $1.31/share for the comparable quarter last year. Though earnings per share fell 4.5%, revenue increased to $5.8 billion from $4.4 billion for the 1999 quarter. The 32% increase in revenue reflected strong growth from the US Electric segment, that was driven by continued customer growth and warmer than normal weather related sales, according to the company.


TXU reported third quarter net income of $328 million, or $1.25/share, on fewer shares down from $361 million, or $1.31/share, for the comparable quarter last year. Though earnings per share fell 4.5%, revenue increased to $5.8 billion from $4.4 billion for the 1999 quarter.

The 32% increase in revenue reflected strong growth from the US Electric segment, that was driven by continued customer growth and warmer than normal weather related sales, according to the company.

TXU also noted that good results from TXU Europe and dramatically improved results from Australia contributed to the growth in revenue.

The US gas business improved its results in spite of a warm winter by stringent cost control measures. Revenue was up 11% and operation and maintenance expenses were down over 16%, the company said.

But overall operating expenses escalated for the Dallas-based energy company this quarter. Total operating expenses jumped 41.4% to $5 billion compared with $3.5 billion for the prior third quarter. TXU attributed these expenses to the preparation of the trading and retail operations for the opening of the Texas electricity market in 2002.

One analyst in New York who didn�t want to be identified said he couldn�t comment on TXU this time. He wanted to more fully understand why the �stock was trailing the group.�

Other industry sources say TXU's big bet made in Europe is starting to lose some luster. The investments in generation in England that were supposed to be unregulated turned out to be more affected by unfriendly regulatory actions than previously anticipated.

The company is in the midst of selling off non-core assets. Over the last 12 months, it has received $750 million in proceeds. Additional sales are expected and all proceeds are going to debt reduction, said Mike McNally, chief financial officer, in a statement.

The company repurchased 5.2 million shares for $186 million in the third quarter. So far this year, TXU has repurchased 17.9 million shares reducing the shares outstanding by 10%.

The stock price closed slightly down at 34 15/16 off 5/16ths of a point in composite trading on the New York Stock Exchange.

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