While the losses continued last year at Reliant Resources, the company was able to slow the bleeding in the fourth quarter of 2003 to a loss of $29 million, or $0.10 per share, from continuing operations compared to a loss of $176 million, or $0.60 per share, for 4Q2002. Reliant reported net income of $32.5 million (11 cents/share) in the fourth quarter compared to a net loss of $648.6 million ($2.23/share) in 4Q2002.

Improved fourth quarter results were due to higher profits from the company’s retail operations and reduced losses from its wholesale operations, partially offset by higher interest expense.

For full-year 2003, Reliant recorded a loss from continuing operations of $902 million, or $3.07 per share, compared to earnings of $123 million, or $0.42 per diluted share, for 2002. The company attributed the massive loss to wholesale energy operations, including a goodwill impairment of $985 million, and higher interest expense partially offset by higher profits from its retail energy segment.

Reliant’s retail energy segment contributed earnings before interest and taxes (EBIT) of $143 million in the fourth quarter of 2003, compared to $31 million of EBIT in the fourth quarter of 2002. Adjusted retail energy EBIT for the quarter was $159 million in the fourth quarter, compared to $106 million in the same period of the previous year. The company attributed the improvement in adjusted EBIT to higher revenues from electricity sales resulting primarily from an increase in the price-to-beat rate and increased volumes due to the company’s continued success in customer acquisition and retention, partially offset by higher supply costs.

For full-year 2003, the retail energy segment produced EBIT of $621 million, compared with $520 million of EBIT for 2002. Excluding the previously mentioned items that affected 4Q earnings, adjusted EBIT for the retail energy segment was $734 million in 2003, compared to $657 million the previous year.

The wholesale energy segment experienced a loss before interest and taxes of $44 million in the fourth quarter of 2003, compared to a loss before interest and taxes of $188 million in the same period of 2002. Excluding the effects of reserves related to its California operations and charges for settlements with the CFTC and FERC, the adjusted wholesale energy loss before interest and taxes was $45 million for the fourth quarter of 2003, compared with an adjusted loss before interest and taxes of $72 million for the same period of 2002.

For full-year 2003, Reliant reported that the wholesale energy segment experienced a loss of $934 million, compared to EBIT of $30 million for 2002. Excluding certain impairments, the effects of reserves related to the company’s California operations and charges for settlements with the FERC and CFTC, the wholesale energy segment produced EBIT of $11 million in 2003, compared to $195 million of EBIT in 2002.

Going forward, CEO Joel Staff said the company is planning to further reduce costs by $200 million to accelerate the company’s return to financial strength. These reductions are in addition to the $140 million cost reduction plan announced in the third quarter of 2003. For 2004, Reliant’s adjusted earnings per share outlook is $0.25.

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