TXU Scores Coup in CEO Hire

It taps Entergy's Wilder to lead its turnaround.
By Melissa Davis ,

TXU

( TXU) has stolen some power from a competitor.

The Texas utility hired a top

Entergy

(ETR) - Get Report

executive -- recognized as the best CFO in the industry -- to become its turnaround CEO. Ending a search that began last summer, TXU announced on Monday that it has chosen Entergy CFO C. John Wilder as its new leader. Wilder replaces veteran TXU executive Erie Nye, who announced his plans to retire last May. The new CEO takes over immediately.

"It's the right time to step down as chief executive and welcome a new, supremely talented leader to TXU," Nye said. "TXU is at a critical juncture with the potential to be a break-out company. I'm confident John Wilder's leadership will take a good company to the next level."

TXU's stock jumped $1.61, or 6.5%, to $26.44 on news of the appointment.

Wilder has spent the past five years on the turnaround management team at Entergy. During his tenure there, Entergy managed to achieve industry-leading returns, earnings growth and debt-ratio improvement. The company also escaped the huge meltdown that burned other utilities -- including TXU -- after the fall of

Enron

.

"TXU could not have made a better choice for CEO than John," Entergy CEO J. Wayne Leonard said on Monday. "While we will miss him both personally and professionally, his move is an overall positive for the industry."

Entergy went on to credit Wilder for "establishing a new standard of excellence in financial disclosure" in the sector. But the company also said its new CFO, Leo Denault, is "deeply prepared" to take over.

Denault joined Entergy five years ago as vice president of corporate development. He has served most recently as Entergy's chief risk officer and has sat on the company's disclosure committee since its inception in 2002.

"I have worked with Leo for about 18 years, and he has always been a 'go-to' guy for both John and me," Leonard said on Monday. "His capabilities span a wide range of financial disciplines -- from corporate development to risk management -- and his knowledge of the utility industry and of commodity markets is unmatched at Entergy."

Entergy shares remained stable, inching up 10 cents to $58, following Denault's promotion.

Elsewhere in the sector,

Dominion

(D) - Get Report

shook off news of a fresh impairment charge Monday morning. The new $44 million charge, taken on some Australian pipeline assets, will reduce 2003 net income from $1.14 a share to $1 a share. It will have no effect on 2003 operating earnings of $4.55 a share, however.

"The impairment represents adjustments to the assets' book value to reflect Dominion's current evaluation of the assets' fair-market value, less estimated costs to sell," the company explained.

Dominion's stock climbed 33 cents to $63.13 despite news of the charge.

Duke

(DUK) - Get Report

, which is attempting to sell some Australian assets of its own, slipped 2 cents to $21.50 Monday morning. The North Carolina utility is banking on its Australian properties -- as well as some distressed power plants in the southeastern United States -- to generate the funds necessary to pay down debt and keep its investment-grade credit intact.

Earlier this month, Standard & Poor's cut the ratings of Duke Energy Australia to BBB-minus -- just one notch above junk -- during a reduction of other Duke ratings. The ratings agency does, however, expect Duke to shed the Australian assets. It is more concerned with proceeds from the domestic power plants and the company's "ambitious" debt-reduction plan overall.

"Although the current ratings provide marginal headroom if debt is not reduced fully as outlined," S&P stated, "substantial deviations from the debt-reduction schedule could place the ratings under pressure and cause a change in the outlook to negative."

Duke has nevertheless rallied in recent months since hiring its own turnaround CEO, Paul Anderson.

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