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1' '00 HSTNCHRON 1
1 ibO Hous. Chron. 1
2000 WL 4275898
(Publication page references are not available for this document.)
Houston Chronicle
  Copyright 2000

Wednesday, January 19, 2000

BUSINESS

Enron's earnings skyrocket 29 percent in fourth quarter
MICHAEL DAVIS
  Staff

  Enron Corp. reported a 29 percent jump in fourth-quarter earnings
Tuesday as its retail services business recorded its first profit
right on schedule.

  The Houston company's retail services division handles retail
sales of electricity and natural gas as well as energy management
services. The group sells directly to major buyers, including such
cc-nanies as Polaroid.

  .she retail services division made its first splash with television
ads during the Super Bowl in 1998, at the time an unusual move for a
company such as Enron. Since then, the fast-growing division has lost
$187 million, even though it signed $8.5 billion in contracts during
1999 alone.

  The company fulfilled its prediction that the retail services
division would be in the black in the fourth quarter. It earned $7
million.

  "This business has reached critical mass in contracting activity
and service capabilities, and profitability is expected to accelerate
rapidly," Enron Chairman Ken Lay said in a written statement.

  Overall, the company had fourth-quarter net income of $259
million, or 31 cents per share, on revenues of nearly $11 billion.
That compared with net of $176 million, or 25 cents per share, on
revenues of $7.7 billion in the fourth quarter of 1998. The 1998
quarter's net income included a one-time gain of $45 million and a
one-time loss of $40 million.

  The company matched analysts' expectations for the quarter to the
p y, according to the average of earnings estimates compiled by
Call/Thomson Financial.

Copr.  West 2004 No Claim to Orig. U.S. Govt. Works

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Database
ALLNEWS

GOVERNMENT
EXHIBIT
  1232
  Crim. No. H-04-25 (S-2)


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1/19/00 HSTNCHRON 1 Page 2
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  )ron's fourth-quarter results held no surprises for investors.
Tne company will be making a presentation to analysts on Thursday, at
which it is expected to lay out its long-term strategy for its
growing telecommunications business.

  "The numbers looked good," said Carl Kirst, energy analyst with
Jefferies & Co. in Houston. "They delivered a profit in the retail
division, and that was important."

  The modest profit does not mean the retail group is finished with
start-up costs. As the company expands its retail services operations
into international markets, Enron is likely to have more up-front
expenses, Kirst said.

  For all of 1999, Enron reported net earnings of $957 million, or
$1.10 per share, compared with $698 million, or $1.01 per share, in
1998, after removing onetime items. Revenues grew from $31.3 billion
to $40.1 billion.

  Enron's stock closed Tuesday at 55 1/2, down 7/8.

  The star performer at Enron for the quarter - as has been the case
every quarter of 1999 - was the wholesale energy operations and
  ices division, which includes natural gas and power sales as well
energy finance.

  The wholesale group had fourth-quarter operating earnings of $263
million, compared with $201 million in the fourth quarter of 1998.
For all of 1999, the wholesale group increased its operating income
36 percent to $1.3 billion from 1998's $968 million.

  The company's transportation and distribution group, which
includes Enron's naturalgas pipelines as well as its electric
utility Portland General Electric, had fourth-quarter operating
earnings of $202 million, compared with $168 million during the
fourth quarter of 1998.

  During the fourth quarter of last year, Enron struck a deal to
  sell Portland General Electric to Sierra Pacific Resources, a holding
company that operates electric utilities in the Lake Tahoe area, for
$2.1 billion. That deal is expected to close this year, the company
said Tuesday.

---- INDEX REFERENCES ----

1AMED PERSON: KIRST, CARL

'JORDS: RETAIL SALES

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