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Sales to Ex-Enron Customers Help Dynegy Profit Rise 36%

January 24, 2002|From Bloomberg News

Dynegy Inc. said fourth-quarter profit rose 36%, partly boosted by electricity sales to former customers of insolvent Enron Corp.

Profit from operations climbed to $144 million, or 41 cents a share, from net income of $106 million, or 32 cents, a year earlier. Revenue fell 13% to $8.74 billion.

Dynegy's power sales more than doubled last quarter from a year earlier, and costs from canceling its bid for rival Enron were less than expected, executives said. Dynegy's stock gained after earnings matched analyst estimates, rising $1.25, or 5.4%, to $24.55 on the New York Stock Exchange. Shares fell 26% last quarter and had dropped 54% in the last year.

Dynegy's trading and marketing profit rose 58% last quarter from a year earlier, boosted by business from customers trying to lock in gas and electricity prices. North American gas sales rose 14%.

Dynegy wrote off $51 million, or 14 cents a share, in the quarter for its trading business with Enron, which filed for bankruptcy last month. Other costs included $7 million, or 2 cents a share, to end its bid for Enron in November and $9 million, or 3 cents, for severance costs related to its Illinois electric utility. That made net income $77 million, or 21 cents a share.

The company had said Enron costs might reach $125 million. Dynegy will pay a $65-million dividend over two years to Chevron Texaco Corp. for its participation in the Enron bid.

ChevronTexaco owns 27% of Dynegy and provided $1.5 billion to Dynegy for its $23-billion bid.

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