Following through on a promise made last spring to stabilize operations and improve earnings, TXU Corp. CEO Erle Nye on Monday said the company will deliver 10% higher earnings than previously forecast, and expects to report $1 a share for the third quarter, compared with a previous guidance of 90 cents.

Nye said the boost came from better-than-expected earnings from its North American energy unit, as well as a strong performance from its only remaining overseas holdings, TXU Australia. The higher guidance will top Wall Street estimates, which had pegged the Dallas-based company’s earnings at about 92 cents a share. TXU will release its quarterly earnings on Nov. 5.

TXU’s senior executives previewed the company’s positive quarterly earnings at the annual Edison Electric Institute Financial Conference on Monday. Nye said the timing of operating costs strengthened the energy unit’s earnings, while cold weather, increased large business sales and lower wholesale prices propelled its Australian business.

Nye said TXU is meeting or exceeding its plan for customer retention and large-business contracting in Texas. Cost cutting efforts also are delivering results, he said. In May, Nye promised to keep liquidity high and work aggressively to strengthen the company’s balance sheet (see Daily GPI, May 9).

CFO Dan Farell told analysts Monday that he is “comfortable” with the market consensus estimates for TXU this year of about $2 a share. Farell said 2004 financial planning is still in progress, but added that TXU now is targeting share growth of 4-6% in the next 12 months. Wall Street analysts currently expect the company to earn $2.01 a share in 2003 and $2.08 a share in 2004. For 2002, TXU reported earnings of $622 million, or $2.21 a share, excluding charges. TXU is scheduled to release its third quarter earnings on Nov. 5.

TXU Communications, the company’s telecommunications business, is expected to be sold in the first quarter. The company also is considering a possible partial initial public offering of its Australian business, but offered no details. TXU Australia is the company’s remaining overseas business.

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