Dynegy said today it swung to a loss in the first quarter as market prices for power surged, causing accounting losses on some forward sales. The Houston-based power provider said it lost $152 million, or 18 cents per share, compared with profit of $14 million, or 3 cents per share, in the same period last year.
Revenue rose 53 percent to $774 million, up from $505 million a year earlier, as the company benefited from its $4.1 billion acquisition of rival LS Power Group's generating assets last April. Thomson Financial said analysts expected a profit of 5 cents per share on $894.7 million in revenue.
Dynegy said market prices for energy rose significantly in the period, leading to $284 million in mark-to-market accounting losses on certain forward power sales. When a company marks to market, it adjusts the value of assets on its books to reflect current market conditions.
"The higher prices we're seeing in the forward markets, particularly in 2009 and beyond, reflect the overall tightening of electricity markets and rising energy commodity prices that set the marginal price in the marketplace," Bruce Williamson, Dynegy's chairman and chief executive, said in a statement.
Williamson said the company's larger, more diverse generation portfolio — helped by the LS Power deal — is paying off. Dynegy said volumes rose year-over-year in its Midwest and West regions, but fell slightly in the Northeast.
Revenue rose 53 percent to $774 million, up from $505 million a year earlier, as the company benefited from its $4.1 billion acquisition of rival LS Power Group's generating assets last April. Thomson Financial said analysts expected a profit of 5 cents per share on $894.7 million in revenue.
Dynegy said market prices for energy rose significantly in the period, leading to $284 million in mark-to-market accounting losses on certain forward power sales. When a company marks to market, it adjusts the value of assets on its books to reflect current market conditions.
"The higher prices we're seeing in the forward markets, particularly in 2009 and beyond, reflect the overall tightening of electricity markets and rising energy commodity prices that set the marginal price in the marketplace," Bruce Williamson, Dynegy's chairman and chief executive, said in a statement.
Williamson said the company's larger, more diverse generation portfolio — helped by the LS Power deal — is paying off. Dynegy said volumes rose year-over-year in its Midwest and West regions, but fell slightly in the Northeast.
Source: Associated Press
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