Germany's E.ON, the world's largest utility, missed analyst forecasts with a 1 percent dip in first-quarter operating earnings, as it lost money on trading activities and earnings from Britain fell. In a statement on Wednesday, E.ON said higher purchase prices for gas had hurt its overall results, and blamed the rising euro and lower profit from selling power to households rather than to businesses for the weak showing in Britain.
Adjusted earnings before interest and taxes (EBIT) fell to 3.28 billion euros ($5.10 billion) in the three months through March versus an average forecast for a rise of 2.2 percent to 3.39 billion euros by 16 analysts polled by Reuters. European competitors including Italy's Enel, Europe's third-largest utility, France's Suez and Spain's Gas Natural all increased earnings and beat expectations over the same period.
The company trades at 15 times estimated 2008 earnings, lower than more than half of the members on the DJ Stoxx utilities index and than peers such as EDF, the world's second-largest utility. Net income dropped less than expected, slipping 29 percent to 2.35 billion euros, while 13 analysts polled by Reuters had forecast net profit of 2.03 billion euros. Last year's earnings were boosted by book gains.
Chief Executive Wulf Bernotat is buying power plants in Spain, Italy, France and Russia, after 60 billion euros of divestments as regulation of the company's home market dents profits. He is also investing around 38 billion euros to 2010 in new power generation, including in the construction of some 17 new power plants throughout Europe to benefit from soaring power prices.
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