Electricity Prices Jolt TXU to Profit

[AP / DAVID KOENIG, AP Business Writer]

DALLAS (AP) -- TXU Corp. said Thursday that first-quarter
profits quadrupled, helped by higher prices for electricity.
The Dallas-based utility company earned $177 million, or 50
cents per share, compared to $40 million, or 14 cents per share, a
year earlier.
Excluding some costs to retire gas plants and pay severance
to employees, the company said it would have earned 63 cents per
share from continuing operations in the January-March period.
Analysts surveyed by Thomson First Call predicted 57 cents per
share.
Revenue rose to $2.99 billion from $2.76 billion a year ago.
TXU shares gained $1.51, or 4.2 percent, to close at $37.31
on the New York Stock Exchange.
New chief executive John Wilder said the company is
considering asking Texas regulators for another increase in base
rates due to the high cost of natural gas used in its power plants.
A previous 3.4 percent request is pending, and Wilder said he was
optimistic it would be approved.
Under Texas law, TXU and other former monopoly utilities are
allowed to raise their base rates twice a year after increases in
natural gas prices.
TXU is also considering slowing its aggressive campaign to
sell electricity outside of its Dallas-Fort Worth area base in new
markets, such as Houston, where it competes against other former
monopoly utilities. Wilder said it is less profitable to compete in
new markets because of the costs of finding and servicing new
customers.
The company said it would offer more details on strategy at
a May 18 meeting with analysts near Dallas.
TXU reiterated its forecast last month of earning $2.45 to
$2.55 per share for all of 2004. That prediction does not include
$241 million, or 71 cents per share, in what the company terms
one-time costs.
TXU has been retreating from a failed effort to become a
global energy trader and retailer.
After disastrous results in Europe in 2002, the company sold
its operations there. Last month, the company announced it has sold
its Australian subsidiary and a gas pipeline unit and wants to sell
its Texas natural gas business to focus on generating and selling
electricity.
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On the Net:
TXU Corp.: www.txucorp.com