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Reliant Has Big Loss on Charge

Before the item, the company beats estimates handily.

Reliant Resources


swung to a third-quarter loss due to goodwill writedowns, but it said that after backing out the items, its results came in ahead of expectations.

The company provided full-year guidance that falls short of analysts' estimates, however.

The Houston-based company reported a loss from continuing operations of $791 million, or $2.69 a share, in the quarter, compared with earnings of $108 million, or 37 cents a share, in the year-ago quarter. Excluding a goodwill impairment charge, the company earned $218 million, or 74 cents a share in the quarter. Analysts were expecting 43 cents a share.

"Our retail business performed exceptionally well, and our wholesale business turned in a solid performance in spite of continued weak market conditions," said Joel Staff, chairman and CEO.

Shares were lately up 26 cents, or 5%, at $5.49.

Reliant's retail energy business earned $371 million before taxes and interest, compared with $241 million a year ago. The company cited in part increased margins from electricity sales.

In its wholesale business, however, the company had a loss of $876 million, before taxes and interest, compared with earnings of $91 million in the same period last year. Excluding the goodwill impairment and a settlement charge, the wholesale segment had earnings before taxes and interest of $146 million in the current quarter.

Looking to 2003, Reliant expects to earn 10 cents a share, excluding certain charges. Analysts are calling for 17 cents a share. On a generally accepted accounting basis, the company sees a loss of $3.39 a share for the year.