Calpine Reports Net Loss, Misses Analysts’ Forecasts

From Bloomberg News

Calpine Corp., which produces electricity in 23 U.S. states, disclosed Tuesday that it had an unexpected net loss of about 12 cents a share in the first quarter because of equipment-repair costs and the dollar’s drop against Canada’s currency. The stock fell as much as 13%.

The loss before costs was about 3 cents a share. The company was projected to make 4 cents, excluding some expenses, according to the average estimate of analysts surveyed by Thomson First Call.

The net loss in the year-earlier period was $74.3 million, or 24 cents, including costs for canceling $3 billion of turbine purchases.

Results in the quarter may have been hurt after the price of natural gas, used as a fuel at many of Calpine’s generators, more than doubled from a year earlier, analysts said.


Unexpected outages at Calpine plants, most of which are less than 4 years old, added to losses, the company said in a statement outlining preliminary results.

“It was coal and nuclear plants that made money in the past quarter,” said Dorothea Matthews, a fixed-income analyst for Credit Sights Inc. “But you’d have expected them not to have a loss.”

Shares of San Jose-based Calpine fell 60 cents to $4.90 on the New York Stock Exchange after dropping as low as $4.80.

The first-quarter loss included $25 million, or 5 cents a share, for repairs to equipment under warranty, Calpine said. A rise in the Canadian dollar cost $22 million, or 4 cents. Canada’s currency rose 6.3% in the quarter.


Argus Research analyst Jeffrey Gildersleeve said he wouldn’t exclude the currency and repair costs from his income calculations.

“Repairs to fairly new plants are a concern,” said Gildersleeve, who rates Calpine shares “hold” and owns some.

Per-share profit this year before some items will be about 41 cents, matching analysts’ projections, Calpine said. The company usually has higher earnings in the second and third quarters, when air-conditioning demand increases sales, spokesman Richard Barraza said. About 69% of Calpine’s generating capacity is in California and the South.

The company also said it won’t file its first-quarter results to regulators by the May 15 deadline because it has changed auditors to PricewaterhouseCoopers from Deloitte & Touche. Calpine gave no reason for the switch.