Its merger with MCN Energy had a significant negative impact on second quarter earnings, DTE Energy reported, but it was able to partially mitigate the impact of electric restructuring costs. It also expects improved results during the third and fourth quarters.

DTE had a second quarter loss of $87 million, or $0.60 per share, including the impact of merger restructuring charges and goodwill amortization. It recorded a $236 million one-time, before-tax restructuring charge ($153 million after-tax) for employee separation costs related to its merger with MCN. About 1,400 employees with overlapping functions were offered early retirement packages, designed to reduce the work force, which stands at about 11,300.

DTE announced operating earnings of $70 million, or $0.48 per basic and diluted share, excluding the impact of merger restructuring charges and goodwill amortization. Earnings for the 2000 second quarter were $108 million, or $0.76 per basic share. Absent the positive impacts of the fuel clause suspension related to Michigan’s June 2000 restructuring legislation of $0.27 per share, the quarter is comparable to last year. Company officials said DTE remains on track to reach its previously stated year-end earnings projection of $3.50 to $3.60 per share, excluding the impact of merger restructuring charges and goodwill amortization.

“While Michigan’s 2000 electric restructuring legislation has caused the distribution of quarterly earnings to shift significantly, we expect to reach our year-end 2001 earnings projection,” said CEO Anthony F. Earley Jr. “We remain focused on building a diverse portfolio of profitable non-regulated businesses, which are on track to contribute an estimated $130 million in net income by year-end.”

Earley said that the company’s non-regulated businesses continue to play an important role in DTE Energy’s future success. In line with the company’s growth strategy, DTE Energy Technologies recently completed the successful testing of Pratt & Whitney/Turbo Genset 400 kW miniturbine, while DTE Energy Services began construction on a jointly owned 320-megawatt (MW) natural gas-fired electric power generating plant in the Chicago area.

“Certainly the highlight of the second quarter was successfully completing the merger with MCN Energy,” Earley said. “We now will begin to benefit from projected cost synergies and a positive DTE Energy gas earnings stream during the remainder of the year. As we integrate these two great companies we remain focused on providing sustainable growth and creating attractive value opportunities for our shareholders.”

DTE completed the $4 billion purchase (including debt assumption) of MCN this spring (see Daily GPI, June 4).

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