This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Aquila Posts Another Big Loss

Frantic efforts to extricate itself from the unprofitable energy trading business led to another steep loss at Aquila (ILA) in the second quarter.

The Kansas City energy company, which has been trying to transform itself into a pure-play utility for about a year, lost $80.6 million, or 41 cents a share, in the second quarter, compared with $810 million, or $5.69 a share, last year. The latest quarter included a $103 million impairment cost, mainly reflecting the termination of a contract, plus $20.8 million in restructuring charges, which included $17.8 million for getting out of an interest-rate swap.

The company said the loss was "anticipated" and noted it continued to sell off assets in the quarter, including an Australian venture, while strengthening its domestic networks business. "We will continue our restructuring through this year and next," Aquila said, "especially our work to address our remaining long-term natural gas contracts and fixed capacity payments for merchant power plants."

Reflecting the asset sales, sales fell 32% to $403.2 million.

Aquila's problematic involvement with energy trading shows up in its capacity services segment, which lost $115.6 million before interest and taxes in the second quarter. The loss reflected a terminated contract, "higher gas prices which made it uneconomical to operate merchant plants," and a $28.6 million decrease in mark-to-market gains reflecting lower liquidity and electricity prices in the futures market.

"Aquila does not expect capacity services to be profitable during the next two to three years because of the industry's excess generation capacity that became operational in 2002, the continued construction of additional power plants and the decreasing liquidity in the marketplace," Aquila said. "The resulting downward pressure on power prices has reduced the value of unsold merchant generation capacity."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.24 1.30%
FB $99.75 -4.15%
GOOG $683.10 -0.07%
TSLA $147.99 -8.99%
YHOO $27.05 -3.30%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs