E.ON’s Fourth Quarter Earnings Declines More Than Estimated
E.ON, Germany’s major energy service provider, posted its fourth quarter profits, which fell more than had been estimated. Revenues of the energy service provider fell 23%, ending at 1.89 billion euros (2.9 billion dollars). According to the median estimation of seven analysts that were surveyed by Bloomberg, profits of E.ON was estimated to be around 1.03 billion euros.
Average energy prices in Germany rose 44%, which boosted electricity sales for the company. Compensating tax gains for the previous year in connection with energy offshoots also benefited revenues for the company.
Wulf Bernotat, the chief executive officer of E.ON, said that the company’s shares rose 88% in the last three years. These figures were confirmed by Ulf Moritzen, manager of shares at Nordinvest, who said the company will continue to make profits.
Utilities have undergone political pressures in the means of severe networking guidelines and competition. The company is been operating stably and is growing perfectly said Moritzen. E.ON gained 1.3% to end at 123.33 euros; this is the biggest gain for the company since it had seen a reduction of 15% last year.
Fourth quarter sales increased to 19.9 billion euros as compared to the estimated 18.2 billion euros the company was expecting. Profits before tax and interest deduction also climbed up to 2.06 billion euros, against the expectations of 1.98 billion euros.
E.ON proposed to increase its dividend from the year 2007 profits to 4.10 euros. In the previous year the fourth quarter profits of the company have always been boosted due to tax rebates totaling roughly 1.05 billion euros.
Utilities stabilized even more than last year, according to International Financial Reports. Marcus Schenck, chief financial officer, said that according to the copies distributed to the reporters, higher restrictions in the wholesale business of producing energy and needed reevaluations for the regions nuclear waste disposal responsibilities had had a positive result.
Last year’s net income climbed to 7.2 billion euros, in comparison to estimations made by analysts which were 6.35 billion euros. The year’s sales also advanced to 70.8 billion euros, an increase of 4.6%. German utilities earned higher energy sales in the fourth quarter following increase in the energy prices. According to the GFI group broker, German energy sales averaged to 70.44 euros in comparison to 48.94 euros in the previous year.
Second largest utility company in Germany, RWE AG, said that its fourth quarter sales climbed to 11 billion euros, an increase of 6.7%. However the company’s quarterly net declined to 168 million euros, following American Water units reevaluating. In order to resolve the antitrust probes of the European Union into the company’s business observations, E.ON said that it had offered to sell its energy grid.
Discussion Area - Leave a Comment
You must be logged in to post a comment.