Dynegy Inc. on Friday previewed its quarterly earnings report, announcing that its core businesses’ results met management’s expectations. However, while power generation, natural gas liquids and regulated energy delivery did well, those results will be offset by higher-than-expected corporate-level expenses, including pending litigation, which will result in a net loss for the quarter.

The company intends to announce second quarter results next Friday (July 25). Following the completion of its recently announced refinancing plan (see Daily GPI, July 16), Dynegy will hold a conference call the week of August 11.

What will hit the bottom line during the second quarter are several things, the company explained in a written statement, including the expected loss in Dynegy’s energy merchant business, its Customer Risk Management segment, which it is in the process of exiting. Also hitting earnings are the following:

“The higher than expected second quarter corporate-level expenses will negatively impact 2003 results,” the company said. “In addition, it is anticipated that the proposed refinancing plan announced by the company on July 15, if consummated on the terms currently expected, will increase interest expense due to higher cash interest expense and the acceleration of the amortization of previously capitalized financing costs. The company intends to update its 2003 guidance estimate as soon as practicable following the expected completion of the proposed refinancing plan.”

Dynegy’s revised guidance estimate will include the operating results of its generation, natural gas liquids and regulated energy delivery segments, as well as corporate-level expenses. Additionally, the revised guidance estimate will continue to exclude the results associated with the company’s Customer Risk Management segment, which includes tolling contracts, and its discontinued operations, which include the company’s former communications business, as well as costs to exit these businesses.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.