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Enron Mail |
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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "Collazo, Judy E [EQRE]" <judy.e.collazo@ssmb.com< X-To: undisclosed-recipients:, X-cc: X-bcc: X-Folder: \Lawrence_Whalley_Dec2000\Notes Folders\Discussion threads X-Origin: Whalley-L X-FileName: gwhalley.nsf UCU: Energy Merchant Drives Strong 3Q Earnings; Aquila Transaction By Year End * This morning, UtiliCorp reported recurring operating EPS of $0.50, in-line with our estimate, and a 8.7% increase from $0.46 in the year ago quarter. * Results exclude a $44 million or $0.30 per share gain from the IPO of Uecomm, the telecom arm of their Australian subsidiary United Energy. * Aquila energy merchant segment remains growth driver; EBIT up 87% yr./yr., and now contributes 42.1% of UtiliCorp's earnings. * Aquila expects to begin transacting in the high-growth bandwidth commodity market in Q4:00 or Q1:01; we see Aquila as one of the first-movers, behind Enron and Dynegy (both rated 1H) in this nascent market. * We reiterate our 1H (Buy, High Risk) rating and $36 price target for UtiliCorp. We feel that a strategic transaction involving Aquila (i.e. IPO, joint venture)-- expected by the end of the year-- will enable UtiliCorp to extract Aquila's value as a leading Energy Merchant. <<trc75567.pdf<< Raymond C. Niles Power/Natural Gas Research Salomon Smith Barney (212) 816-2807 ray.niles@ssmb.com s - trc75567.pdf
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