Calpine Profit Drops 17% as Demand Falls
Calpine Corp., one of the biggest U.S. power producers, said Thursday that its profit fell 17% in the fourth quarter as electricity prices dropped because of lower industrial demand and mild weather.
The San Jose-based company said net income declined to $111.5million, or 33 cents a share, from $134.7 million, or 40 cents, a year earlier, even as revenue climbed 57% to $1.72 billion.
The results matched the average estimate of analysts polled by Thomson Financial/First Call.
Electricity prices fell more than 50% in most of the U.S. last quarter, dropping 90% on the California-Oregon border, according to Bloomberg Energy Service statistics.
Calpine, which produces enough power to supply 11.1 million U.S. homes, has about half its generators in California.
Calpine nearly doubled its generating capacity in the last year to 11,100 megawatts. Costs of buying and marketing power almost tripled to $916.4 million, though, even as gas prices fell 59% on the New York Mercantile Exchange.
Shares of Calpine rose 14 cents to $11.20 on the New York Stock Exchange. They have tumbled 72% in the last year, along with other power producers, after the collapse of energy trader Enron Corp. raised investors’ concerns about debt-laden companies.
Calpine said its total debt more than doubled in the last year to $12.7 billion. It has $1.8 billion in cash on hand, Chief Executive Peter Cartwright said.
Another major energy provider, Entergy Corp., reported a 47% drop in earnings to $26.6 million, or 9 cents a share, as revenue fell 28% to $1.89 billion.
New Orleans-based Entergy sells electricity to about 2.6 million customers in Southern states and operates nine nuclear power generators.
Entergy shares rose $1.31 to $41.18 on the NYSE.
Other earnings from California companies, excluding one-time items unless noted:
* Cheesecake Factory Inc. said fourth-quarter income grew 16% to $10.9 million, or 23 cents a share, on an 18% jump in revenue to $148.8 million.
* Dole Food Co. said fourth-quarter profit from continuing operations was $4.1 million, or 7 cents a share, beating analysts’ estimates of 4 cents, as it cut costs in its core banana business. The results exclude a gain of $168.6 million from the sale of its Honduran beer unit. Sales fell 1.9% to $982.5 million. Dole had a loss of $18.2 million, or 32 cents a share, a year earlier.
* Gilead Sciences Inc. reported a fourth-quarter loss of $22.9 million, or 24 cents a share. Analysts had expected a 29-cent loss. The biotechnology company said revenue, including sales from the recently introduced Viread HIV treatment, rose 42% to $74.3 million. The latest results exclude a $154.5-million gain from the sale of its cancer business. Gilead lost $18.4 million, or 20 cents a share, a year ago.
