Dynegy Turns To Profit In Q3, Backs Full-year Outlook

(RTTNews) - Electric utility Dynegy Inc. (DYN) on Thursday reported a turnaround to profit in the third quarter, reflecting higher earnings at the company's gas segment that offset the impact of lower prices at its coal segment. Looking ahead, Dynegy affirmed its fiscal 2013 outlook for adjusted EBITDA and free cash flow range.

Dynegy, which emerged from bankruptcy in October 2012, noted that higher earnings at its gas segment related to higher capacity and resource adequacy payments as well as the absence of negative settlements associated with legacy commercial positions more than offset an operating loss at the company's coal segment due to lower realized prices.

Operating income at Dynegy's gas segment for the third quarter rose 12 percent to $74 million from $66 million in the prior-year period. Operating loss at the coal segment narrowed to $34 million from $46 million in the year-ago period.

Houston, Texas-based Dynegy's net income for the third quarter was $22 million or $0.22 per share, compared to loss of $41 million in the year-ago period. On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share for the quarter. Analysts' estimates typically exclude one-time items.

Income from continuing operations for the quarter was $24 million or $0.24 per share, compared to loss from continuing operations of $39 million in the same period last year.

Enterprise-wide Adjusted EBITDA for the quarter was $113 million, compared with $50 million in the prior-year period.

Revenues for the quarter rose to $446 million from $443 million in the year-ago period. Analysts had a consensus revenue estimate of $509.41 million for the quarter.

Looking ahead to fiscal 2013, Dynegy forecasts net loss in a range of $391 million to $415 million, adjusted EBITDA of $200 million to $225 million, and free cash flow of $190 million to $215 million.

In mid-March, Dynegy said that its subsidiary Illinois Power Holdings, LLC or IPH acquire Ameren Corp.'s (AEE) merchant generation business, Ameren Energy Resources or AER. The FERC approved the IPH-Ameren transaction in October.

Dynegy noted that the Illinois Pollution Control Board or IPCB is expected to make its decision on IPH's request for variance relief on or before November 21, 2013.

Further, Dynegy said that if the request for variance relief is approved, it expects to close the transaction in December 2013. The company continues to expect annual synergies from the transaction to be $75 million.

In Thursday's regular trading session, DYN is trading at $19.92, up $0.43 or 2.21 percent on a volume of 25,265 shares.