Enron: Businesses Performing "Extremely Well"
Responding to persistent rumors over the Thanksgiving weekend of a possible profit warning, Enron COO Jeff Skilling last week denied problems with earnings for any of the myriad energy and communications businesses for North America's largest buyer and seller of natural gas and electricity.
"All of our businesses are performing extremely well and we are very comfortable with consensus analyst earnings estimates of $0.35 per share in the fourth quarter of 2000, and $1.65 for the full year 2001," said Skilling in a prepared statement. First Call/Thomson Financial analysts had forecast earnings per share of $.03 in the fourth quarter and $1.66 in 2001.
The day before Thanksgiving, Enron spokesman Mark Palmer said that the company decided to uncharacteristically respond to rumors after hearing "persistent" talk that the company was going to "put out a profit warning." Palmer said he did not know how the rumor started. He said the rumor did not start in Internet chat rooms, but rather, the company began getting telephone calls from analysts.
"We've never said anything but that we're comfortable with analysts' expectations," Palmer said.
Last week CEO Ken Lay said that he was aware of criticism that the Houston-based company appeared to lack any focus because it was moving in so many directions. He called the concern "legitimate," and said "it's something we talk about internally. We need to be careful we don't take on too many new markets at one time. We need to prove that we can do what we say we're going to do," such as the broadband market.
In the Internet chat rooms over the weekend, Enron shareholders seemed delighted with the rise and short-term fall of the stock, with one sharing the news that he had traded in some of his child's college fund to obtain more Enron shares while the price was lower. Some shareholders said they expected the fourth quarter earnings to rise even higher, then fall back in 2001.
Shares of Enron stock rose $2.19 to $77.75 in trading on the New York Stock Exchange last Friday in abbreviated trading. They had fallen to a low of $75.54 on Wednesday, down from $80 a week earlier and a high of $90 on Aug. 23. At close Monday, the stock had risen to $79.36.
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