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Calpine Reports $216.7-Million Loss Amid Higher Fuel and Interest Costs

November 04, 2005|From Times Wire Services

Calpine Corp., a San Jose-based power producer that is battling bondholders over proceeds from asset sales, posted a third-quarter net loss of $216.7 million on Thursday as fuel and interest costs rose.

Executives also said the power producer probably would miss its debt-reduction target.

Calpine reported a net loss of $216.7 million, or 45 cents a share, contrasted with net income of $141.1 million, or 32 cents, a year earlier. Revenue climbed 36% to $3.28 billion from $2.41 billion.

Fuel costs surged 49% to $1.57 billion, outstripping a 36% increase in power sales, Calpine said. Interest costs rose 33% to $381 million as the below-investment grade company borrowed at higher rates. Calpine has been selling assets to boost its cash and extend debt maturities during an electricity glut that reduced demand for its power.

Calpine's goal of reducing debt is still its main priority even though it will fall short of meeting its previously stated target, executives said in a conference call. Noting that it has reduced its outstanding debt by $1.1 billion to $17.2 billion, the executives acknowledged that Calpine was unlikely to reach its goal of cutting debt by $3 billion by year's end.

"We're somewhat disappointed in the speed of selling assets and our inability to use the proceeds," said Robert Kelly, Calpine's chief financial officer. Some bondholders have sued over how the company spends the money from asset sales.

Shares of Calpine fell 8 cents to $2.30.

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