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Dynegy Is Optimistic on Earnings

Kevin Burke

Embattled energy provider Dynegy(DYN Quote) issued optimistic guidance Tuesday for its fiscal 2003 earnings.

The Houston-based company said it expects to post a full-year net profit of $31 million to $54 million, or 8 cents a share to 15 cents a share. Wall Street analysts, on average, were projecting that the company would earn 3 cents a share, according to Thomson Financial/First Call. Operating cash flow, including working capital changes, is expected to be $1.2 billion to $1.3 billion in 2003. The estimates don't include businesses the company is currently exiting, such as communications and third-party marketing and trading.

In terms of liquidity, the company said it maintains $1.47 billion, including $915 million in cash and $1.4 billion in bank lines. The company also said it reduced its bank exposure and debt by roughly $850 million and plans to repay another $100 million later this month.

Dynegy is one of a number of energy concerns to get hammered after the government launched an investigation into its so-called round-trip trading practices.

The shares were up 37 cents, or 25.4%, to $1.78 in recent trading on the New York Stock Exchange . The stock lost 95% of its value in 2002.