Mirant Earns $467 Million

Good hedging helped energy generator Mirant(MIR Quote) report sharply higher first-quarter earnings Wednesday.

Mirant earned $467 million, or $1.51 a share, in the quarter, up from $11 million a year ago, when the company was in Chapter 11. The latest quarter had a gain of $298 million, or 96 cents a share, from marking derivatives to market, and a gain of $40 million, or 13 cents a share, from asset sales.

Adjusted for items, Mirant earned $142 million, or 46 cents a share, in the quarter.

Mirant produced adjusted earnings before interest, taxes, depreciation and amortization of $340 million, up from $167 million a year ago, "driven largely by higher realized margins from hedging activities in the company's U.S. business."

"Our hedging strategy has been effective," said Mirant, which got out of bankruptcy in January. "We are substantially hedged for the year, which has produced more predictable financial results, mitigating milder weather experienced across much of the U.S. during the quarter. Our performance demonstrates the value created by our hedging program."

The company guided to adjusted EBITDA of $1.15 billion to $1.3 billion in 2006, raising the low end from $1.1 billion. For 2007, it sees adjusted EBITDA of $1.3 billion to $1.7 billion. Mirant ended the quarter with $1.73 billion in cash and equivalents and total debt of $4.5 billion.

The stock closed at $24.37 Tuesday.