dumped another ration of bad news on the market Wednesday, saying its second-quarter loss widened substantially from a year ago while a Canadian court directed proceeds from a recent asset sale into a subsidiary to cover potential bond redemptions.
Calpine, the once high-flying power merchant whose stock has traded below $6 for the better part of two years, lost $298.5 million, or 66 cents a share, in the second quarter, compared with a loss of $28.7 million, or 7 cents a share, a year earlier. Revenue rose 0.5% from a year ago to $2.2 billion.
The latest quarter included a loss of 4 cents a share from continuing operations and charges netting to 11 cents a share from power-plant impairments, the termination of several long-term leases, and debt redemption gain. Analysts surveyed by Thomson First Call were expecting a loss of 29 cents a share on sales of $2.5 billion.
The stock fell 31 cents, or 8%, to $3.57 early Wednesday.
"During the second quarter, spark spreads were mixed, and Calpine experienced several unplanned equipment outages in key power markets," the company said. "Although demand in the second quarter was dampened by mild weather, especially in April and May, since June we have seen strong demand for electricity and improving spark spreads in our major power markets."
In May, Calpine announced a sweeping initiative to cut its overall debt by about $3 billion. The company has since completed or announced more than $2 billion of transactions aimed at the achieving the goal and said it has cut debt by $1.3 billion to $17.4 billion since the start of the current quarter.
One of the transactions was the May sale of its Saltend Energy Center for $906 million to
International Power PLC
. In a separate release Wednesday, the company said the Supreme Court of Nova Scotia on Tuesday indicated it plans to order proceeds of that sale to be set aside to cover the possible repayment of certain bonds issued by its Calpine Canada Energy Finance II unit.
In announcing the Saltend sale on May 31, Calpine said proceeds would be used to redeem two existing series of redeemable preferred shares for about $620 million.