Stemming in part from the decision to discontinue its telecommunications business, TXU posted second quarter 2003 earnings of $105 million, or $0.31 per diluted share of common stock, compared to $195 million, or $0.73 per diluted share of common stock, recorded for the second quarter of 2002. The company announced its intent to sell its telecommunications business in May and expects the sale to be completed during the first half of 2004.

From continuing operations, TXU’s 2Q2003 earnings were $171 million, or $0.49 per diluted share of common stock, compared to second quarter of 2002 results of $172 million or $0.64 per diluted share of common stock. The $0.49 per share exceeded market expectations of $0.35 per diluted share.

“TXU’s second quarter results exceeded expectations and confirmed that the company is executing successfully on its 2003 plan,” said Dan Farell, CFO. “We continue to deliver on our initiatives of enhancing credit, reducing debt, lowering costs and aggressively defending and building upon our leadership positions in Texas and Australia.”

The North America Energy segment — containing the company’s generation, portfolio management, and retail operations — delivered $154 million of net income in the second quarter of 2003, compared to $183 million in the second quarter of 2002. TXU said the lower results were mainly driven by decreased contribution margin and higher interest expense.

TXU’s North America Energy Delivery segment — which includes the electric transmission and distribution assets as well as the company’s natural gas pipeline and distribution business — provided $36 million of net income in the second quarter of 2003 compared to $41 million in the second quarter of 2002. Natural gas delivery results improved by $8 million as a result of decreased interest expense and increased contribution margin, while electric delivery results declined $13 million primarily as a result of increased interest expense due to more permanent financing and reduced reliance on bank borrowings.

Looking ahead, TXU’s guidance for full year earnings from continuing operations before the cumulative effect of changes in accounting principles remains unchanged at $2.00 to $2.10 per share. Earnings per share for the third quarter are expected to be around $0.90.

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.