TXU Profit Rises 33% Despite Revenue Decline

TXU Corp. announced yesterday its 4Q06 net earnings rose 33% despite a decline in revenue. In what will likely be one of its last earnings reports before going private in the largest private buyout yet, TXU reported profit after items of $475 million, good for EPS of $1.03 versus profit of $356 million (EPS of $0.74) in the year-earlier period. Excluding one-time items, TXU's EPS was $1.21; analysts were expecting EPS of $1.20. Despite the increase in profit, revenue fell to $2.04 billion from $2.46 billion. The company blamed the decline on mild winter weather and lost customers. For FY2006, TXU reported a profit of $2.55 billion and EPS of $5.46, compared to $1.71 billion (EPS of $2.50) in FY2005.

Sources: Press Release, Wall Street Journal, Bloomberg, MarketWatch, Houston Chronicle
Commentary: TXU Acquisition: Are Investors Succumbing To Short-Term Thinking? • TXU Buyout: Consider the Consequences • TXU Soaring: Largest Leveraged Buyout in U.S. Corporate History
Stocks/ETFs to watch: TXU Corp. (TXU). Competitors: American Electric Power Co. Inc. (AEP), Centerpoint Energy Inc. (CNP), Reliant Energy Inc. (RRI). ETFs: Utilities HOLDRs (UTH), Utilities Select Sector SPDR (XLU), Vanguard Utilities ETF (VPU)

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