enron mentions usa : update 1 - energy casts some light in gloomy profit season .
reuters english news service , 10 / 16 / 01
usa : energy permits some light in gloomy profit season .
reuters english news service , 10 / 16 / 01
usa : interview - enron says may partner or sell broadband business .
reuters english news service , 10 / 16 / 01
usa : update 6 - enron posts loss after taking $ 1 bln in charges .
reuters english news service , 10 / 16 / 01
enron has third - quarter loss after expansion fails ( update 9 )
bloomberg , 10 / 16 / 01
usa : update 1 - energy casts some light in gloomy profit season .
by per jebsen
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
new york , oct 16 ( reuters ) - energy and mining companies have provided a few glimmers of light but otherwise third - quarter results on monday and tuesday are helping to fulfill expectations for the worst quarter in 10 years .
technology bellwethers intel corp . and international business machines corp . , which reported sharply lower profits , did little to buck the downward trend .
firstenergy corp . , an owner of electric utilities in northern ohio and western pennsylvania , on tuesday reported a better - than - expected 18 percent increase in earnings , citing increased electricity sales and lower costs . mining company freeport - mcmoran copper & gold inc . reported a third - quarter profit that reversed a year - earlier loss , due to higher gold production .
yet such good news is proving more the exception than the rule . top chipmaker intel said on tuesday after the close of exchanges that profits tumbled 77 percent as it suffered from slowing global economies and weak personal computer sales . pc maker ibm announced its first quarterly earnings decline since the end of 1999 as weak sales continued to weigh on profits .
energy giant enron corp . posted a quarterly loss after taking $ 1 . 01 billion in charges . companies from a range of industries reported profit shortfalls , including caterpillar inc . , the world ' s largest maker of construction equipment , and unisys corp . , a computer company .
" the earnings season is one that the market has digested and in some cases predigested as being just ugly , and therefore horrible or ugly results are not met with surprise at this point , " said michael holland , who runs the $ 65 million holland balanced fund .
focus not on earnings
" the focus ( for investors ) has been and continues to be outside of earnings , that is , the war on terrorism specifically , " he said .
dynegy inc . , a natural gas and power marketer and trader , on monday said third - quarter earnings rose 62 percent as its backbone wholesale energy business nearly doubled its returns . while enron posted a loss , it reported that its profit excluding charges rose 35 percent due to strong performance in its core energy business .
" energy companies manage to earn pretty good money even when prices are down , " said jon burnham , portfolio manager for the $ 170 million burnham fund . " these are good , well - financed companies . "
caterpillar helped to lead a litany of earnings woes . the peoria , illinois - based company on tuesday said its third - quarter earnings fell 5 percent because of higher expenses and less efficient manufacturing .
the company also said it expects fourth - quarter revenues to be down slightly from the year - ago quarter , with full - year profit down 10 percent to 15 percent . it blamed economic uncertainty in the wake of last month ' s attacks for the expected shortfall , but added that 2002 sales will be at least flat to up slightly from 2001 levels .
unisys on monday reported its third - quarter profits plunged by 50 percent due to weakening demand for high - end server computers and systems integration work . it said it would cut 3 , 000 jobs and slashed its fourth - quarter outlook .
taking grim tidings in stride
other companies that have reported profit drops include novellus systems inc . , a maker of semiconductor production equipment , and charles schwab corp . , the top u . s . discount brokerage . schwab said tuesday that quarterly earnings fell 51 percent as customers avoided stocks all summer , although a surge in september trading pointed to better times ahead .
money managers are taking the grim profit tidings in stride .
" most of these earnings situations are in these stocks , " said burnham . " barring unforeseens in the national and international situation , the market should work its way higher over the next 6 to 9 months . "
" whatever earnings are in this quarter isn ' t going to matter too much , except in cases where they ' re considerably better than expected or worse , " he said .
this week is the busiest for earnings with 15 dow jones industrial average and 180 standard & poor ' s 500 index companies scheduled to report .
profits for the companies in the index are expected to shrink by 22 . 8 percent , according to market research firm first call / thomson financial , making it the worst quarter since the second quarter of 1991 . that ' s down from an expected 6 . 2 percent decline at the beginning of the quarter , and a 14 . 7 percent drop expected on sept . 10 , said first call analyst joe cooper .
some 85 s & p 500 companies so far have reported quarterly results . of these , 50 companies have beaten the most recent , often lowered wall street expectations while 26 have matched and nine have missed forecasts .
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : energy permits some light in gloomy profit season .
by per jebsen
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
new york , oct 16 ( reuters ) - energy and mining companies provided a few glimmers of light but otherwise third - quarter results on monday and tuesday are helping to fulfill expectations for the worst quarter in 10 years .
firstenergy corp . , an owner of electric utilities in northern ohio and western pennsylvania , on tuesday reported a better - than - expected 18 percent increase in earnings , citing increased electricity sales and lower costs . mining company freeport - mcmoran copper & gold inc . reported a third - quarter profit that reversed a year - earlier loss , due to higher gold production .
yet such good news is proving more the exception than the rule . energy giant enron corp . . ene ) posted a quarterly loss after taking $ 1 . 01 billion in charges . companies from a range of industries reported profit shortfalls , including caterpillar inc . , the world ' s largest maker of construction equipment , and unisys corp . , a computer company .
" the earnings season is one that the market has digested and in some cases predigested as being just ugly , and therefore horrible or ugly results are not met with surprise at this point , " said michael holland , who runs the $ 65 million holland balanced fund .
" the focus ( for investors ) has been and continues to be outside of earnings , that is , the war on terrorism specifically , " he said .
investors are likely to pay attention to the earnings reports from tech bellwethers international business machines corp . , a computer maker , and chipmaker intel corp . . these are scheduled to be released on tuesday after the close of trading .
dynegy inc . , a natural gas and power marketer and trader , on monday said third - quarter earnings rose 62 percent as its backbone wholesale energy business nearly doubled its returns . while enron posted a loss , it reported that its profit excluding charges rose 35 percent due to strong performance in its core energy business .
" energy companies manage to earn pretty good money even when prices are down , " said jon burnham , portfolio manager for the $ 170 million burnham fund . " these are good , well - financed companies . "
caterpillar helped to lead a litany of earnings woes . the peoria , illinois - based company on tuesday said its third - quarter earnings fell 5 percent because of higher expenses and less efficient manufacturing .
the company also said it expects fourth - quarter revenues to be down slightly from the year - ago quarter , with full - year profit down 10 percent to 15 percent . it blamed economic uncertainty in the wake of last month ' s attacks for the expected shortfall , but added that 2002 sales will be at least flat to up slightly from 2001 levels .
unisys on monday reported its third - quarter profits plunged by 50 percent due to weakening demand for high - end server computers and systems integration work . it said it would cut 3 , 000 jobs and slashed its fourth - quarter outlook .
other companies that have reported profit drops include novellus systems inc . , a maker of semiconductor production equipment , and charles schwab corp . , the top u . s . discount brokerage . schwab said tuesday that quarterly earnings fell 51 percent as customers avoided stocks all summer , although a surge in september trading pointed to better times ahead .
money managers are taking the grim profit tidings in stride .
" most of these earnings situations are in these stocks , " said burnham . " barring unforeseens in the national and international situation , the market should work its way higher over the next 6 to 9 months . "
" whatever earnings are in this quarter isn ' t going to matter too much , except in cases where they ' re considerably better than expected or worse , " he said .
this week is the busiest for earnings with 15 dow jones industrial average and 180 standard & poor ' s 500 index . spx ) companies scheduled to report .
profits for the companies in the index are expected to shrink by 22 . 8 percent , according to market research firm first call / thomson financial , making it the worst quarter since the second quarter of 1991 . that ' s down from an expected 6 . 2 percent decline at the beginning of the quarter , and a 14 . 7 percent drop expected on sept . 10 , said first call analyst joe cooper .
some 85 s & p 500 companies so far have reported quarterly results . of these , 50 companies have beaten the most recent , often lowered wall street expectations while 26 have matched and nine have missed forecasts .
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : interview - enron says may partner or sell broadband business .
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
houston , oct 16 ( reuters ) - energy giant enron corp . said on tuesday it is reviewing strategic options for its loss - making broadband telecommunications business , which could involve selling the business or finding a partner .
" in addition to us looking at our business on a standalone business , we clearly have entertained some discussions on other possibilities , " chief executive officer ken lay told reuters in a telephone interview .
earlier on tuesday , enron reported that one - time charges of $ 1 . 01 billion for broadband and other businesses outside its core energy operations pushed the company to a third - quarter net loss of $ 638 million , its first quarterly loss in more than four years .
future options for the broadband business include " sale , partnership , all kinds of possibilities " he said .
" we still think over time that it will be a valuable business , " lay said , but for now the broadband market is in a " total meltdown " , he added .
enron ' s broadband unit , which owns an 18 , 000 mile network , posted a loss of $ 80 million for the third quarter , but lay said losses should be smaller in subsequent quarters .
enron launched its broadband business last year , predicting that network capacity would one day be traded like natural gas or electricity , but it has recently admitted that it overestimated the market ' s early potential and has scaled down its operations .
enron ' s stock rose by 87 percent last year , driven by enthusiasm for the broadband plans and the success of the enrononline internet energy and commodity trading platform .
but the stock has fallen some 59 percent so far this year as sentiment toward the broadband project soured , ceo jeff skilling resigned after only six months in the job and wrangling continued over enron ' s stalled dabhol power plan project in india .
enron shares on tuesday closed up 67 cents , or 2 . 02 percent , at $ 33 . 84 .
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : update 6 - enron posts loss after taking $ 1 bln in charges .
by c . bryson hull
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
washington , oct 16 ( reuters ) - enron corp . on tuesday reported its first loss in more than four years after taking $ 1 . 01 billion in charges on ill - fated investments , including water and telecommunications services , which it said have clouded the strength of its core energy businesses .
enron , north america ' s biggest marketer and trader of natural gas and power , said the charges were an attempt to put its house in order after a tumultuous year in which a new chief executive suddenly resigned and the company ' s stock lost two - thirds of its value as once enthusiastic investors lost faith in the company .
" what we ' ve tried to do here is clean up anything that we thought needed cleaning up to get these distractions out of the way , " chief executive officer ken lay said in a conference call .
lay reassumed the ceo mantle at enron after his successor , jeff skilling , resigned in august after only six months at the helm .
houston - based enron reported a third - quarter net loss of $ 638 million , or 84 cents a share , compared with net income of $ 271 million , or 34 cents a share , in the same period of 2000 . it was enron ' s first loss since the second quarter of 1997 .
the charges covered the company ' s loss - making broadband telecommunications business , its troubled water affiliate azurix , and new power co . , enron ' s retail electricity joint - venture with aol / time warner and ibm .
commerzbank securities analyst andre meade said it would probably take enron a few more quarters to rebuild confidence in the company which was a wall street favorite just 12 months ago .
" they do a couple of things very well and if they stick to their knitting , they ' re a solid company , but they have stumbled when they strayed further afield , " said meade .
enron ' s stock closed 67 cents higher at $ 33 . 84 on tuesday , but for the year it is down about 59 percent , underperforming the standard & poor ' s utilities index . spu ) , which has fallen some 23 percent over the same period .
ill - fated businesses
originally a natural gas pipeline operator , enron seized on opportunities created by the deregulation of u . s . energy markets to become the nation ' s dominant wholesale marketer and trader of natural gas and electricity .
the company moved into the water services business in 1998 by acquiring britain ' s wessex water and forming azurix , a unit which enron took public in 1999 but had to buy back this year after it failed to meet performance targets and its stock price tumbled .
enron helped set up new power co . and take it public last year but its stock has since fallen from about $ 28 per share to less than $ 2 as companies have found it hard to make a profit in deregulated u . s . residential electricity markets .
enron also launched a broadband telecommunications business last year , predicting that network capacity would one day be traded like natural gas or electricity , but it has recently admitted that it overestimated the market ' s early potential .
enron ' s stock soared past sector peers last year when it posted a gain of 87 percent , driven by enthusiasm for the broadband plans and the success of its enrononline internet energy and commodity trading platform .
but the stock has fallen sharply this year as broadband sentiment soured , skilling resigned and wrangling continued over enron ' s stalled dabhol power plan project in india .
enron ' s third - quarter earnings before one - time charges rose to $ 393 million , or 43 cents a share , from $ 292 million , or 34 cents a share , meeting analysts ' expectations of 42 to 45 cents a share , according to thomson financial / first call .
the company reaffirmed its previously stated earnings targets of 45 cents a share for the fourth quarter , $ 1 . 80 for all of 2001 and $ 2 . 15 for all of 2002 .
debt on credit review
rating agency moody ' s investors service on tuesday said it had placed all of enron ' s long - term debt obligations on review for a possible downgrade . the writedowns would reduce enron ' s equity base , increase its nominal financial leverage and materially impact its earnings , moody ' s said .
enron ' s third - quarter earnings report showed that income at its wholesale marketing and trading division , the company ' s backbone moneymaker , grew 28 percent .
the division , which deals primarily in electricity and natural gas , saw pretax income rise to $ 754 million from $ 589 million in the third quarter of 2000 .
all of the income growth in the segment came from enron ' s gas and power trading and marketing operations in the americas , where income grew to $ 701 million from $ 536 million last year .
the european segment , which includes gas and power operations there and other commodity sales like metals , coal and crude oil , remained flat at $ 53 million amid lower volatility .
the latest earnings report marked the first time that enron has provided a financial breakdown of the european and americas wholesale operations .
in doing so , lay delivered on a promise he made after skilling ' s departure : that he would make enron ' s financial reporting more transparent . many analysts and investors had grumbled about a lack of clarity from enron .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron has third - quarter loss after expansion fails ( update 9 )
2001 - 10 - 16 16 : 29 ( new york )
enron has third - quarter loss after expansion fails ( update 9 )
( adds in sixth paragraph that losses are equal to 70 percent
of enron ' s profits over the last four quarters . closes shares . )
houston , oct . 16 ( bloomberg ) - - enron corp . , the largest
energy trader , had a $ 618 million loss in the third quarter after
expansion into water , telecommunications and retail - energy sales
cost the company $ 1 . 01 billion .
the loss was 84 cents a share after payment of preferred
dividends , enron said . net income a year earlier was $ 292 million ,
or 34 cents . revenue rose 59 percent to $ 47 . 6 billion .
investors have sent enron stock down 60 percent this year on
concern about investments outside energy trading and natural - gas
pipelines . some investors praised kenneth lay , enron ' s chairman
and chief executive officer , for acknowledging the failure of the
new businesses . others said they ' re not confident all the bad news
is out .
` ` what is disconcerting is that they didn ' t do this sooner , ' '
said donald coxe , manager of the $ 352 million harris insight
equity fund . ` ` if you kill one cockroach in the kitchen , it
doesn ' t mean there aren ' t more . ' '
investors have questioned enron ' s financial reporting in the
past year , especially after jeffrey skilling ' s resignation as ceo
in august . skilling , who helped lay transform enron from a gas -
pipeline company into the top competitor in energy trading , said
he left for personal reasons . investors said they weren ' t
confident enron was detailing all its problems .
failed businesses
the $ 1 . 01 billion in losses , which total $ 1 . 11 a share , are
equal to 70 percent of enron ' s $ 1 . 45 billion in profits over the
past four quarters .
included were $ 544 million for losses on investments in new
power co . , a venture formed with aol time warner inc . and
international business machines corp . new power competes for
energy sales in states that allow consumers to choose power and
gas suppliers as they do long - distance phone companies .
the $ 544 million also includes losses from the enron unit
that trades space , known as bandwidth , on fiber - optic networks , as
well as for the ` ` early termination of certain structured finance
arrangements ' ' with an undisclosed ` ` entity . ' ' enron wouldn ' t be
more specific .
enron said restructuring the fiber - optic unit would cost
another $ 180 million , including severance pay to 500 fired
workers . the business collapsed this year along with the fortunes
of the dot - com companies that were expected to be some off its
biggest customers .
the declining value of assets owned by azurix corp . , its
water and sewage treatment business , will cost $ 287 million , enron
said .
enron might take a first - quarter ` ` adjustment ' ' of less than
$ 200 million because of accounting changes related to goodwill ,
lay said in an interview . ` ` if we thought there were any other
significant concerns , we would have taken care of them today , ' '
lay said .
excluding losses
minus the losses , enron would have earned $ 393 million , or 43
cents a share , up 35 percent from the year - earlier period . that
matched the average estimate of analysts surveyed by thomson
financial / first call .
enron has averaged quarterly profit increases of 31 percent
for the past year . its wholesale services business , which includes
energy trading , had income before interest , minority interests and
taxes of $ 754 million , up 28 percent from a year earlier .
shares of enron rose 67 cents to $ 33 . 84 . earlier , the stock
had risen as much as 5 . 2 percent to $ 34 . 90 .
` ` there ' s a sigh of relief that enron ' s core businesses , its
energy merchant businesses , are ok , ' ' said roger hamilton , who
helps manage john hancock ' s value funds , which own 600 , 000 shares .
enron said it still expects to earn 45 cents a share in the
fourth quarter , $ 1 . 80 for the full year and $ 2 . 15 in 2002 .
` ridiculous investments '
at one time , enron pinned high hopes on the businesses that
contributed to the $ 1 . 01 billion in losses .
enron spent $ 2 . 8 billion in 1998 for the u . k . ' s wessex water ,
from which azurix emerged . enron sold shares to the public in
1999 , and then bought back the company this year after azurix
failed in its strategy of buying up water companies and winning
large projects . in august , enron agreed to sell azurix ' s north
american business to american water works inc . for $ 150 million .
in february 2000 , lay said trading bandwidth could become the
company ' s fastest - growing business . in the latest quarter , the
bandwidth unit ' s loss before interest , minority interests and
taxes widened to $ 80 million from $ 20 million a year earlier .
revenue plunged to $ 4 million from $ 162 million .
` ` you can make the case that jeff skilling leaving was for
the best , ' ' john hancock ' s hamilton said . ` ` under him , they built
the best trading operation while also making all these ridiculous
investments . ' '
while admitting its poor choices , enron also supplied more
information this quarter about how it makes money . the company
gave results of individual commodity - trading desks , including
coal , forest products and steel .
` ` i liked that they broke out the different commodities , ' '
hamilton said . ` ` i think lay has gotten the message loud and
clear , and that the effort is there . ' '
enron mentions
usa : update 1 - energy casts some light in gloomy profit season .
reuters english news service , 10 / 16 / 01
usa : energy permits some light in gloomy profit season .
reuters english news service , 10 / 16 / 01
usa : interview - enron says may partner or sell broadband business .
reuters english news service , 10 / 16 / 01
usa : update 6 - enron posts loss after taking $ 1 bln in charges .
reuters english news service , 10 / 16 / 01
enron has third - quarter loss after expansion fails ( update 9 )
bloomberg , 10 / 16 / 01
usa : update 1 - energy casts some light in gloomy profit season .
by per jebsen
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
new york , oct 16 ( reuters ) - energy and mining companies have provided a few glimmers of light but otherwise third - quarter results on monday and tuesday are helping to fulfill expectations for the worst quarter in 10 years .
technology bellwethers intel corp . and international business machines corp . , which reported sharply lower profits , did little to buck the downward trend .
firstenergy corp . , an owner of electric utilities in northern ohio and western pennsylvania , on tuesday reported a better - than - expected 18 percent increase in earnings , citing increased electricity sales and lower costs . mining company freeport - mcmoran copper & gold inc . reported a third - quarter profit that reversed a year - earlier loss , due to higher gold production .
yet such good news is proving more the exception than the rule . top chipmaker intel said on tuesday after the close of exchanges that profits tumbled 77 percent as it suffered from slowing global economies and weak personal computer sales . pc maker ibm announced its first quarterly earnings decline since the end of 1999 as weak sales continued to weigh on profits .
energy giant enron corp . posted a quarterly loss after taking $ 1 . 01 billion in charges . companies from a range of industries reported profit shortfalls , including caterpillar inc . , the world ' s largest maker of construction equipment , and unisys corp . , a computer company .
" the earnings season is one that the market has digested and in some cases predigested as being just ugly , and therefore horrible or ugly results are not met with surprise at this point , " said michael holland , who runs the $ 65 million holland balanced fund .
focus not on earnings
" the focus ( for investors ) has been and continues to be outside of earnings , that is , the war on terrorism specifically , " he said .
dynegy inc . , a natural gas and power marketer and trader , on monday said third - quarter earnings rose 62 percent as its backbone wholesale energy business nearly doubled its returns . while enron posted a loss , it reported that its profit excluding charges rose 35 percent due to strong performance in its core energy business .
" energy companies manage to earn pretty good money even when prices are down , " said jon burnham , portfolio manager for the $ 170 million burnham fund . " these are good , well - financed companies . "
caterpillar helped to lead a litany of earnings woes . the peoria , illinois - based company on tuesday said its third - quarter earnings fell 5 percent because of higher expenses and less efficient manufacturing .
the company also said it expects fourth - quarter revenues to be down slightly from the year - ago quarter , with full - year profit down 10 percent to 15 percent . it blamed economic uncertainty in the wake of last month ' s attacks for the expected shortfall , but added that 2002 sales will be at least flat to up slightly from 2001 levels .
unisys on monday reported its third - quarter profits plunged by 50 percent due to weakening demand for high - end server computers and systems integration work . it said it would cut 3 , 000 jobs and slashed its fourth - quarter outlook .
taking grim tidings in stride
other companies that have reported profit drops include novellus systems inc . , a maker of semiconductor production equipment , and charles schwab corp . , the top u . s . discount brokerage . schwab said tuesday that quarterly earnings fell 51 percent as customers avoided stocks all summer , although a surge in september trading pointed to better times ahead .
money managers are taking the grim profit tidings in stride .
" most of these earnings situations are in these stocks , " said burnham . " barring unforeseens in the national and international situation , the market should work its way higher over the next 6 to 9 months . "
" whatever earnings are in this quarter isn ' t going to matter too much , except in cases where they ' re considerably better than expected or worse , " he said .
this week is the busiest for earnings with 15 dow jones industrial average and 180 standard & poor ' s 500 index companies scheduled to report .
profits for the companies in the index are expected to shrink by 22 . 8 percent , according to market research firm first call / thomson financial , making it the worst quarter since the second quarter of 1991 . that ' s down from an expected 6 . 2 percent decline at the beginning of the quarter , and a 14 . 7 percent drop expected on sept . 10 , said first call analyst joe cooper .
some 85 s & p 500 companies so far have reported quarterly results . of these , 50 companies have beaten the most recent , often lowered wall street expectations while 26 have matched and nine have missed forecasts .
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : energy permits some light in gloomy profit season .
by per jebsen
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
new york , oct 16 ( reuters ) - energy and mining companies provided a few glimmers of light but otherwise third - quarter results on monday and tuesday are helping to fulfill expectations for the worst quarter in 10 years .
firstenergy corp . , an owner of electric utilities in northern ohio and western pennsylvania , on tuesday reported a better - than - expected 18 percent increase in earnings , citing increased electricity sales and lower costs . mining company freeport - mcmoran copper & gold inc . reported a third - quarter profit that reversed a year - earlier loss , due to higher gold production .
yet such good news is proving more the exception than the rule . energy giant enron corp . . ene ) posted a quarterly loss after taking $ 1 . 01 billion in charges . companies from a range of industries reported profit shortfalls , including caterpillar inc . , the world ' s largest maker of construction equipment , and unisys corp . , a computer company .
" the earnings season is one that the market has digested and in some cases predigested as being just ugly , and therefore horrible or ugly results are not met with surprise at this point , " said michael holland , who runs the $ 65 million holland balanced fund .
" the focus ( for investors ) has been and continues to be outside of earnings , that is , the war on terrorism specifically , " he said .
investors are likely to pay attention to the earnings reports from tech bellwethers international business machines corp . , a computer maker , and chipmaker intel corp . . these are scheduled to be released on tuesday after the close of trading .
dynegy inc . , a natural gas and power marketer and trader , on monday said third - quarter earnings rose 62 percent as its backbone wholesale energy business nearly doubled its returns . while enron posted a loss , it reported that its profit excluding charges rose 35 percent due to strong performance in its core energy business .
" energy companies manage to earn pretty good money even when prices are down , " said jon burnham , portfolio manager for the $ 170 million burnham fund . " these are good , well - financed companies . "
caterpillar helped to lead a litany of earnings woes . the peoria , illinois - based company on tuesday said its third - quarter earnings fell 5 percent because of higher expenses and less efficient manufacturing .
the company also said it expects fourth - quarter revenues to be down slightly from the year - ago quarter , with full - year profit down 10 percent to 15 percent . it blamed economic uncertainty in the wake of last month ' s attacks for the expected shortfall , but added that 2002 sales will be at least flat to up slightly from 2001 levels .
unisys on monday reported its third - quarter profits plunged by 50 percent due to weakening demand for high - end server computers and systems integration work . it said it would cut 3 , 000 jobs and slashed its fourth - quarter outlook .
other companies that have reported profit drops include novellus systems inc . , a maker of semiconductor production equipment , and charles schwab corp . , the top u . s . discount brokerage . schwab said tuesday that quarterly earnings fell 51 percent as customers avoided stocks all summer , although a surge in september trading pointed to better times ahead .
money managers are taking the grim profit tidings in stride .
" most of these earnings situations are in these stocks , " said burnham . " barring unforeseens in the national and international situation , the market should work its way higher over the next 6 to 9 months . "
" whatever earnings are in this quarter isn ' t going to matter too much , except in cases where they ' re considerably better than expected or worse , " he said .
this week is the busiest for earnings with 15 dow jones industrial average and 180 standard & poor ' s 500 index . spx ) companies scheduled to report .
profits for the companies in the index are expected to shrink by 22 . 8 percent , according to market research firm first call / thomson financial , making it the worst quarter since the second quarter of 1991 . that ' s down from an expected 6 . 2 percent decline at the beginning of the quarter , and a 14 . 7 percent drop expected on sept . 10 , said first call analyst joe cooper .
some 85 s & p 500 companies so far have reported quarterly results . of these , 50 companies have beaten the most recent , often lowered wall street expectations while 26 have matched and nine have missed forecasts .
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : interview - enron says may partner or sell broadband business .
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
houston , oct 16 ( reuters ) - energy giant enron corp . said on tuesday it is reviewing strategic options for its loss - making broadband telecommunications business , which could involve selling the business or finding a partner .
" in addition to us looking at our business on a standalone business , we clearly have entertained some discussions on other possibilities , " chief executive officer ken lay told reuters in a telephone interview .
earlier on tuesday , enron reported that one - time charges of $ 1 . 01 billion for broadband and other businesses outside its core energy operations pushed the company to a third - quarter net loss of $ 638 million , its first quarterly loss in more than four years .
future options for the broadband business include " sale , partnership , all kinds of possibilities " he said .
" we still think over time that it will be a valuable business , " lay said , but for now the broadband market is in a " total meltdown " , he added .
enron ' s broadband unit , which owns an 18 , 000 mile network , posted a loss of $ 80 million for the third quarter , but lay said losses should be smaller in subsequent quarters .
enron launched its broadband business last year , predicting that network capacity would one day be traded like natural gas or electricity , but it has recently admitted that it overestimated the market ' s early potential and has scaled down its operations .
enron ' s stock rose by 87 percent last year , driven by enthusiasm for the broadband plans and the success of the enrononline internet energy and commodity trading platform .
but the stock has fallen some 59 percent so far this year as sentiment toward the broadband project soured , ceo jeff skilling resigned after only six months in the job and wrangling continued over enron ' s stalled dabhol power plan project in india .
enron shares on tuesday closed up 67 cents , or 2 . 02 percent , at $ 33 . 84 .
copyright ? 2000 dow jones & company , inc . all rights reserved .
usa : update 6 - enron posts loss after taking $ 1 bln in charges .
by c . bryson hull
10 / 16 / 2001
reuters english news service
( c ) reuters limited 2001 .
washington , oct 16 ( reuters ) - enron corp . on tuesday reported its first loss in more than four years after taking $ 1 . 01 billion in charges on ill - fated investments , including water and telecommunications services , which it said have clouded the strength of its core energy businesses .
enron , north america ' s biggest marketer and trader of natural gas and power , said the charges were an attempt to put its house in order after a tumultuous year in which a new chief executive suddenly resigned and the company ' s stock lost two - thirds of its value as once enthusiastic investors lost faith in the company .
" what we ' ve tried to do here is clean up anything that we thought needed cleaning up to get these distractions out of the way , " chief executive officer ken lay said in a conference call .
lay reassumed the ceo mantle at enron after his successor , jeff skilling , resigned in august after only six months at the helm .
houston - based enron reported a third - quarter net loss of $ 638 million , or 84 cents a share , compared with net income of $ 271 million , or 34 cents a share , in the same period of 2000 . it was enron ' s first loss since the second quarter of 1997 .
the charges covered the company ' s loss - making broadband telecommunications business , its troubled water affiliate azurix , and new power co . , enron ' s retail electricity joint - venture with aol / time warner and ibm .
commerzbank securities analyst andre meade said it would probably take enron a few more quarters to rebuild confidence in the company which was a wall street favorite just 12 months ago .
" they do a couple of things very well and if they stick to their knitting , they ' re a solid company , but they have stumbled when they strayed further afield , " said meade .
enron ' s stock closed 67 cents higher at $ 33 . 84 on tuesday , but for the year it is down about 59 percent , underperforming the standard & poor ' s utilities index . spu ) , which has fallen some 23 percent over the same period .
ill - fated businesses
originally a natural gas pipeline operator , enron seized on opportunities created by the deregulation of u . s . energy markets to become the nation ' s dominant wholesale marketer and trader of natural gas and electricity .
the company moved into the water services business in 1998 by acquiring britain ' s wessex water and forming azurix , a unit which enron took public in 1999 but had to buy back this year after it failed to meet performance targets and its stock price tumbled .
enron helped set up new power co . and take it public last year but its stock has since fallen from about $ 28 per share to less than $ 2 as companies have found it hard to make a profit in deregulated u . s . residential electricity markets .
enron also launched a broadband telecommunications business last year , predicting that network capacity would one day be traded like natural gas or electricity , but it has recently admitted that it overestimated the market ' s early potential .
enron ' s stock soared past sector peers last year when it posted a gain of 87 percent , driven by enthusiasm for the broadband plans and the success of its enrononline internet energy and commodity trading platform .
but the stock has fallen sharply this year as broadband sentiment soured , skilling resigned and wrangling continued over enron ' s stalled dabhol power plan project in india .
enron ' s third - quarter earnings before one - time charges rose to $ 393 million , or 43 cents a share , from $ 292 million , or 34 cents a share , meeting analysts ' expectations of 42 to 45 cents a share , according to thomson financial / first call .
the company reaffirmed its previously stated earnings targets of 45 cents a share for the fourth quarter , $ 1 . 80 for all of 2001 and $ 2 . 15 for all of 2002 .
debt on credit review
rating agency moody ' s investors service on tuesday said it had placed all of enron ' s long - term debt obligations on review for a possible downgrade . the writedowns would reduce enron ' s equity base , increase its nominal financial leverage and materially impact its earnings , moody ' s said .
enron ' s third - quarter earnings report showed that income at its wholesale marketing and trading division , the company ' s backbone moneymaker , grew 28 percent .
the division , which deals primarily in electricity and natural gas , saw pretax income rise to $ 754 million from $ 589 million in the third quarter of 2000 .
all of the income growth in the segment came from enron ' s gas and power trading and marketing operations in the americas , where income grew to $ 701 million from $ 536 million last year .
the european segment , which includes gas and power operations there and other commodity sales like metals , coal and crude oil , remained flat at $ 53 million amid lower volatility .
the latest earnings report marked the first time that enron has provided a financial breakdown of the european and americas wholesale operations .
in doing so , lay delivered on a promise he made after skilling ' s departure : that he would make enron ' s financial reporting more transparent . many analysts and investors had grumbled about a lack of clarity from enron .
copyright ? 2000 dow jones & company , inc . all rights reserved .
enron has third - quarter loss after expansion fails ( update 9 )
2001 - 10 - 16 16 : 29 ( new york )
enron has third - quarter loss after expansion fails ( update 9 )
( adds in sixth paragraph that losses are equal to 70 percent
of enron ' s profits over the last four quarters . closes shares . )
houston , oct . 16 ( bloomberg ) - - enron corp . , the largest
energy trader , had a $ 618 million loss in the third quarter after
expansion into water , telecommunications and retail - energy sales
cost the company $ 1 . 01 billion .
the loss was 84 cents a share after payment of preferred
dividends , enron said . net income a year earlier was $ 292 million ,
or 34 cents . revenue rose 59 percent to $ 47 . 6 billion .
investors have sent enron stock down 60 percent this year on
concern about investments outside energy trading and natural - gas
pipelines . some investors praised kenneth lay , enron ' s chairman
and chief executive officer , for acknowledging the failure of the
new businesses . others said they ' re not confident all the bad news
is out .
` ` what is disconcerting is that they didn ' t do this sooner , ' '
said donald coxe , manager of the $ 352 million harris insight
equity fund . ` ` if you kill one cockroach in the kitchen , it
doesn ' t mean there aren ' t more . ' '
investors have questioned enron ' s financial reporting in the
past year , especially after jeffrey skilling ' s resignation as ceo
in august . skilling , who helped lay transform enron from a gas -
pipeline company into the top competitor in energy trading , said
he left for personal reasons . investors said they weren ' t
confident enron was detailing all its problems .
failed businesses
the $ 1 . 01 billion in losses , which total $ 1 . 11 a share , are
equal to 70 percent of enron ' s $ 1 . 45 billion in profits over the
past four quarters .
included were $ 544 million for losses on investments in new
power co . , a venture formed with aol time warner inc . and
international business machines corp . new power competes for
energy sales in states that allow consumers to choose power and
gas suppliers as they do long - distance phone companies .
the $ 544 million also includes losses from the enron unit
that trades space , known as bandwidth , on fiber - optic networks , as
well as for the ` ` early termination of certain structured finance
arrangements ' ' with an undisclosed ` ` entity . ' ' enron wouldn ' t be
more specific .
enron said restructuring the fiber - optic unit would cost
another $ 180 million , including severance pay to 500 fired
workers . the business collapsed this year along with the fortunes
of the dot - com companies that were expected to be some off its
biggest customers .
the declining value of assets owned by azurix corp . , its
water and sewage treatment business , will cost $ 287 million , enron
said .
enron might take a first - quarter ` ` adjustment ' ' of less than
$ 200 million because of accounting changes related to goodwill ,
lay said in an interview . ` ` if we thought there were any other
significant concerns , we would have taken care of them today , ' '
lay said .
excluding losses
minus the losses , enron would have earned $ 393 million , or 43
cents a share , up 35 percent from the year - earlier period . that
matched the average estimate of analysts surveyed by thomson
financial / first call .
enron has averaged quarterly profit increases of 31 percent
for the past year . its wholesale services business , which includes
energy trading , had income before interest , minority interests and
taxes of $ 754 million , up 28 percent from a year earlier .
shares of enron rose 67 cents to $ 33 . 84 . earlier , the stock
had risen as much as 5 . 2 percent to $ 34 . 90 .
` ` there ' s a sigh of relief that enron ' s core businesses , its
energy merchant businesses , are ok , ' ' said roger hamilton , who
helps manage john hancock ' s value funds , which own 600 , 000 shares .
enron said it still expects to earn 45 cents a share in the
fourth quarter , $ 1 . 80 for the full year and $ 2 . 15 in 2002 .
` ridiculous investments '
at one time , enron pinned high hopes on the businesses that
contributed to the $ 1 . 01 billion in losses .
enron spent $ 2 . 8 billion in 1998 for the u . k . ' s wessex water ,
from which azurix emerged . enron sold shares to the public in
1999 , and then bought back the company this year after azurix
failed in its strategy of buying up water companies and winning
large projects . in august , enron agreed to sell azurix ' s north
american business to american water works inc . for $ 150 million .
in february 2000 , lay said trading bandwidth could become the
company ' s fastest - growing business . in the latest quarter , the
bandwidth unit ' s loss before interest , minority interests and
taxes widened to $ 80 million from $ 20 million a year earlier .
revenue plunged to $ 4 million from $ 162 million .
` ` you can make the case that jeff skilling leaving was for
the best , ' ' john hancock ' s hamilton said . ` ` under him , they built
the best trading operation while also making all these ridiculous
investments . ' '
while admitting its poor choices , enron also supplied more
information this quarter about how it makes money . the company
gave results of individual commodity - trading desks , including
coal , forest products and steel .
` ` i liked that they broke out the different commodities , ' '
hamilton said . ` ` i think lay has gotten the message loud and
clear , and that the effort is there . ' '