Dynegy 3Q earnings nearly triple, outlook trimmed

The Houston-based company said it made $605 million, or 72 cents a share, for the quarter ended Sept. 30 compared with profit of $220 million, or 26 cents a share, a year ago. Revenue nearly doubled to $1.9 billion from $1 billion.

Analysts polled by Thomson Reuters on average expect earnings of 10 cents per share on revenue of $1.2 billion. Those estimate typically exclude one-time gains.

The profit was driven primarily by mark-to-market gains of $542 million after tax compared with $12 million after tax a year ago.

Under what's known as fair-value accounting, companies have to periodically update their estimate of what investments are worth based on current market values. Dynegy uses the method each quarter.

Dynegy said earnings before interest, taxes, deprecation and amortization fell 23 percent to $268 million in the quarter from $348 million a year ago. Those results exclude the mark-to-market gains.

Like other power generators that have reported third-quarter results, Dynegy said power generation volumes were down in the quarter due to milder than normal summer weather in the Midwest. It also said margins were lower in the Northeast and West.

The Midwest summer was the story for the third quarter, Bruce Williamson, Dynegy's chairman, president and chief executive, said Thursday.

"The third quarter was significantly cooler than in 2007," he said.

Also during the quarter Dynegy recorded a $57 million gain on the sale of a power plant in Wilkesville, Ohio, during the quarter. The year ago quarter included a $110 million after-tax gain on the sale of a plant in suburban Houston.