First-quarter surprises sent two energy stocks racing in opposite directions Thursday. CMS ( CMS) -- the company that first made "round-trip" energy trading famous -- bounced on news that it had toppled Wall Street expectations by nearly doubling quarterly profits. But CMS' gain was relatively modest compared with the plunge in Reliant Resources ( RRI), which bloodied the entire sector by widening its quarterly loss and slashing its guidance for the year. After months of rebuilding following last summer's bombshell about bogus revenue-boosting round-trip trades, CMS showed signs of a rebound in the latest quarter. The Michigan-based utility posted first-quarter profits of $79 million, or 51 cents a share, up from the year-ago 32 cents a share. Profits from ongoing operations, while down a dime from 60 cents a year ago, more than doubled Wall Street expectations of 23 cents a share and triggered a rally in the stock. News of the upside surprise sent CMS shares surging 10.5% to $6.44. The shares have now almost doubled since bottoming out at $3.41 less than two months ago.
During the latest quarter, CMS benefited from uncontrollable events -- such as favorable foreign currency rates and unusually cold weather -- as well as spending cuts. But the company pointed to its overall success during the quarter as signs of a potential recovery. "The record shows we're making good progress," CEO Ken Whipple said. "But there are still many challenges ahead." Even some CMS bears acknowledged that the company delivered a strong first quarter. However, they stopped short of declaring the company mended. "It certainly seems they've stabilized," one short-seller said. "But it will be several years before Grandma will get her dividends again."