NRG stands pat on 2001 earnings outlook

By the OGJ Online Staff

HOUSTON, Aug. 24 -- Independent power producer NRG Energy Inc. Friday said it stands by its outlook earlier this summer earnings for 2001 will be $1.35/share.

The Minneapolis, Minn., company has not altered its outlook despite the falling forward power prices that have unnerved the industry lately sending stock prices down drastically since May.

"Our diversity strategy will help us deliver earnings of $1.35/share in 2001 and we fully expect to increase earnings by at least 25%/year well into the future," said David H. Peterson, NRG CEO in a release. Last year, NRG earned $1.10/share.

Investors traded the stock up by 3.30% to about $17.54/share in noon day trading on the New York Stock Exchange. However, NRG has suffered from the market perception the US will soon experience an electricity glut, if demand slumps in response to the nation's economic woes at the same time supply is increasing from new power plants coming on line.

NRG was trading at $35/share in May. The company has an aggressive growth plan with a goal of reaching 50,000 Mw of generating capacity operating by the end of 2005. Currently, NRG has 34,809 Mw of generating plants in operation, under construction, and in advanced development.

NRG focuses on a strategy that stresses geographic and fuel diversity. The company also has acquired a mix of peaking, intermediate, and base load power plants with its largest acquisition of power plants in the central US. Risk is handled through its own trading organization and selling its portfolio forward.

The company has its own trading organization created over the last 2 years. NRG has expanded its trading capacity and now has 100 traders. Peterson said it has sold more than 75% of its power forward in contracts for 2002.

For the second quarter, NRG earned $49.1 million, or 44¢/share, on $722.9 million of revenue.