usa : persistent problems chinking enron ' s armor . - - - - - original message - - - - -
from : djcustomclips @ djinteractive . com @ enron [ mailto : imceanotes - djcustomclips + 40 djinteractive + 2 ecom + 40 enron @ enron . com ]
sent : thursday , april 12 , 2001 2 : 34 pm
to : 168842 @ mailman . enron . com
subject : rahil jafry : usa : persistent problems chinking enron ' s armor .
usa :
persistent problems chinking enron ' s armor .
by c . bryson hull
04 / 12 / 2001
reuters english news service
( c ) reuters limited 2001 .
houston , april 12 ( reuters ) - the teflon around energy and trading powerhouse
enron corp . is starting to show some scratches , as negative events over the
past few months from india to its broadband unit , begin to take their toll ,
analysts say .
make no mistake , wall street still sees the houston - based giant as the energy
convergence sector leader . analysts polled by thomson financial / first call
still believe enron will meet its earnings per share targets of $ 1 . 75 for 2001 .
but the stock has dropped to its lowest levels since late 1999 , a slide which
started with news that enron ' s keystone broadband content deal with
blockbuster inc . had fallen apart .
the stock had traded in the mid - $ 80 s as recently as february , before the stock
market ' s recent collapse and a string of negative news . on friday , it traded
at $ 57 . 45 on the new york stock exchange , down $ 1 . 06 cents or 1 . 8 percent , and
well off its high of $ 90 . 56 last august .
" their share price hasn ' t been bulletproof and that ' s what counts . they were
up pushing $ 90 and they ' re now in the $ 50 s while the energy sector has done
quite well , so they have underperformed quite a bit and that doesn ' t seem
bulletproof to me , " analyst andre meade of commerzbank securities said .
meade said the price fall came as investors took the bad news out of enron ' s
valuation , particularly in devaluing the broadband business .
" with broadband the market initially gave them full credit . but investors got
smart over the next year , and once you got some bad news out there , you could
argue that valuation was pulled , " meade said .
but the bad news neither starts nor ends there .
the latest negative item came wednesday , when a california federal judge
ordered enron to return the university of california and california state
university systems to direct power access , which enron says will cost them $ 12
million a month .
the universities ' lawsuit which claimed enron energy services breached their
power management contract , could cast a shadow over the houston - based
company ' s power risk management arm which recently saw a huge upsurge in
business involving similar multimillion dollar deals with large corporations .
other bad news includes broadband layoff talk , failed water company spinoff
azurix inc . ' s impending sell - off its north american assets , the failure of the
video on demand deal with blockbuster , word that the $ 2 billion sale of
utility portland general is unlikely to go through and continuing payment
problems at the dabhol power plant in india .
that long - running dispute in india reared its head again on monday . enron
confirmed it issued a notice of political force majeure to the maharashstra
state electricity board ( mseb ) , which has consistently defaulted on payments .
force majeure is an event beyond the control of a contractual party that could
not have been prevented .
" it ' s one of the steps in the process of protecting our rights . it ' s one step ,
but it ' s not the only step , " enron spokesman john ambler said .
enron has already invoked payment guarantees from the indian national
government , but it has refused to cover mseb ' s $ 21 . 9 million december bill
until enron and mseb settle another dispute over a fine . the mseb wants the
$ 85 . 8 million fine , which it levied , to cover its outstanding bills .
layoffs or redeployments ?
another nettling problem for enron is news of trouble at enron broadband
services ( ebs ) , the cutting - edge unit that encompasses a nascent bandwidth
trading operation and a broadband content services business .
most recently , enron has had to answer questions about a reduction in the
number of employees at ebs because of the stock market ' s faltering confidence
in telecoms generally .
two weeks ago , the company characterized word of layoffs at the broadband unit
as nothing more than an internal redeployment of staff to areas that were
growing at a higher rate .
" it ' s word games . initially they said they were redeploying , and that was not
the word i heard from inside the company , but that was the way they put it .
it ' s probably a little of both , " said analyst john olson of houston investment
house sanders morris harris .
ebs spokeswoman kelly kimberly on monday said 227 employees were leaving the
broadband unit to work in other areas of the company .
" most of them have elected to go into the redeployment pool or are already
moved into corporate or another business , " kimberly said .
kimberly did not have an exact figure on the number who have opted to take a
severance package , but characterized it as a small percentage .
it has been a rough few weeks for ebs , which also suffered from the
blockbuster debacle . last month , the two announced a mutual end to a 20 - year
exclusive video on - demand deal , which had been considered a cornerstone of
ebs ' content services push .
folder name : rahil jafry
relevance score on scale of 100 : 79
to review or revise your folder , visit http : / / www . djinteractive . com or contact dow jones customer service by e - mail at custom . news @ bis . dowjones . com or by phone at 800 - 369 - 7466 . ( outside the u . s . and canada , call 609 - 452 - 1511 or contact your local sales representative . )
copyright ( c ) 2001 dow jones & company , inc . all rights reserved
usa : persistent problems chinking enron ' s armor .
- - - - - original message - - - - -
from : djcustomclips @ djinteractive . com @ enron [ mailto : imceanotes - djcustomclips + 40 djinteractive + 2 ecom + 40 enron @ enron . com ]
sent : thursday , april 12 , 2001 2 : 34 pm
to : 168842 @ mailman . enron . com
subject : rahil jafry : usa : persistent problems chinking enron ' s armor .
usa :
persistent problems chinking enron ' s armor .
by c . bryson hull
04 / 12 / 2001
reuters english news service
( c ) reuters limited 2001 .
houston , april 12 ( reuters ) - the teflon around energy and trading powerhouse
enron corp . is starting to show some scratches , as negative events over the
past few months from india to its broadband unit , begin to take their toll ,
analysts say .
make no mistake , wall street still sees the houston - based giant as the energy
convergence sector leader . analysts polled by thomson financial / first call
still believe enron will meet its earnings per share targets of $ 1 . 75 for 2001 .
but the stock has dropped to its lowest levels since late 1999 , a slide which
started with news that enron ' s keystone broadband content deal with
blockbuster inc . had fallen apart .
the stock had traded in the mid - $ 80 s as recently as february , before the stock
market ' s recent collapse and a string of negative news . on friday , it traded
at $ 57 . 45 on the new york stock exchange , down $ 1 . 06 cents or 1 . 8 percent , and
well off its high of $ 90 . 56 last august .
" their share price hasn ' t been bulletproof and that ' s what counts . they were
up pushing $ 90 and they ' re now in the $ 50 s while the energy sector has done
quite well , so they have underperformed quite a bit and that doesn ' t seem
bulletproof to me , " analyst andre meade of commerzbank securities said .
meade said the price fall came as investors took the bad news out of enron ' s
valuation , particularly in devaluing the broadband business .
" with broadband the market initially gave them full credit . but investors got
smart over the next year , and once you got some bad news out there , you could
argue that valuation was pulled , " meade said .
but the bad news neither starts nor ends there .
the latest negative item came wednesday , when a california federal judge
ordered enron to return the university of california and california state
university systems to direct power access , which enron says will cost them $ 12
million a month .
the universities ' lawsuit which claimed enron energy services breached their
power management contract , could cast a shadow over the houston - based
company ' s power risk management arm which recently saw a huge upsurge in
business involving similar multimillion dollar deals with large corporations .
other bad news includes broadband layoff talk , failed water company spinoff
azurix inc . ' s impending sell - off its north american assets , the failure of the
video on demand deal with blockbuster , word that the $ 2 billion sale of
utility portland general is unlikely to go through and continuing payment
problems at the dabhol power plant in india .
that long - running dispute in india reared its head again on monday . enron
confirmed it issued a notice of political force majeure to the maharashstra
state electricity board ( mseb ) , which has consistently defaulted on payments .
force majeure is an event beyond the control of a contractual party that could
not have been prevented .
" it ' s one of the steps in the process of protecting our rights . it ' s one step ,
but it ' s not the only step , " enron spokesman john ambler said .
enron has already invoked payment guarantees from the indian national
government , but it has refused to cover mseb ' s $ 21 . 9 million december bill
until enron and mseb settle another dispute over a fine . the mseb wants the
$ 85 . 8 million fine , which it levied , to cover its outstanding bills .
layoffs or redeployments ?
another nettling problem for enron is news of trouble at enron broadband
services ( ebs ) , the cutting - edge unit that encompasses a nascent bandwidth
trading operation and a broadband content services business .
most recently , enron has had to answer questions about a reduction in the
number of employees at ebs because of the stock market ' s faltering confidence
in telecoms generally .
two weeks ago , the company characterized word of layoffs at the broadband unit
as nothing more than an internal redeployment of staff to areas that were
growing at a higher rate .
" it ' s word games . initially they said they were redeploying , and that was not
the word i heard from inside the company , but that was the way they put it .
it ' s probably a little of both , " said analyst john olson of houston investment
house sanders morris harris .
ebs spokeswoman kelly kimberly on monday said 227 employees were leaving the
broadband unit to work in other areas of the company .
" most of them have elected to go into the redeployment pool or are already
moved into corporate or another business , " kimberly said .
kimberly did not have an exact figure on the number who have opted to take a
severance package , but characterized it as a small percentage .
it has been a rough few weeks for ebs , which also suffered from the
blockbuster debacle . last month , the two announced a mutual end to a 20 - year
exclusive video on - demand deal , which had been considered a cornerstone of
ebs ' content services push .
folder name : rahil jafry
relevance score on scale of 100 : 79
to review or revise your folder , visit http : / / www . djinteractive . com or contact dow jones customer service by e - mail at custom . news @ bis . dowjones . com or by phone at 800 - 369 - 7466 . ( outside the u . s . and canada , call 609 - 452 - 1511 or contact your local sales representative . )
copyright ( c ) 2001 dow jones & company , inc . all rights reserved