Enron Eyes Winner's Circle Well Into Future

Confident in the pliability of their wildly successful business model that has transformed the energy industry, Enron needed no dog-and-pony show as executives trotted out forecasts during an investor's conference yesterday. In the space of a few hours, the Houston-based giant's executives stressed one point again and again: they fully expect to remain the leader in every field they enter into the foreseeable future.

Chairman (and still CEO) Ken Lay opened the day-long conference relaxed and ready to expound on how Enron will sustain its success. He and COO (and soon to be CEO) Jeffrey Skilling said the company's "increasingly strong business prospects" for this year have propelled estimates for 2001 recurring earrings to $1.70 to $1.75 per diluted share.

Skilling, who jokingly boasted that he's been close on earnings forecasts for Enron for the past several years, offered evidence for future growth in each of its divisions, which include wholesale trading and marketing, retail services, transportation and pipelines and its emerging broadband services market. Based on steady, sustainable growth, which he said has come from Enron's flexible business model, Skilling predicted that 2001 would see even stronger growth --- no matter how the economy performs or whatever happens in California.

Among other things, Enron executives evidenced their belief in a swelling forecast for this year because of the following reasons:

  • Enron's further strengthening of its long-standing lead in the North American wholesale energy market, significant expansion of its European wholesale energy business, and an extension of Enron's business model into new, large markets.
  • Significant growth prospects in Enron's retail energy business, including increases in expected total contracting from record 2000 levels of $16.1 billion to an estimated $30 billion in 2001.
  • Substantial completion of Enron's low-cost, flexible and scaleable broadband network, expanded product offerings and an expected eight-fold increase in 2001 deliveries of bandwidth from strong 2000 levels; and
  • Continued steady performance by Enron's interstate gas pipelines.

Already North America's largest buyer and seller of electricity and natural gas, Skilling said emerging businesses also are expected to swamp any competition. Its emerging broadband services should see a huge growth in the next two years, he said. Along with that, Enron's energy management services sector is doing better every day, with strong growth predicted in that new market as well.

Referring to the phenomenal growth of EnronOnline, Skilling said the online trader had no actual competition because its daily sales are so much stronger and affect so many more markets than any other energy trader. As of Wednesday, EnronOnline had conducted 615,000 transactions or about 3,000 a day.

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