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E.On Q3 net income rises to ??1.8 billion

German utility E.On said Wednesday that third quarter net income rose sharply, helped by strong results from its energy trading unit and fewer costs, and raised its outlook.
/ Source: The Associated Press

German utility E.On said Wednesday that third quarter net income rose sharply, helped by strong results from its energy trading unit and fewer costs, and raised its outlook.

E.On, based in Duesseldorf, said it earned ⁈llion ($2.7 billion) in the third quarter from just ⁈llion a year earlier. The year-ago results were affected by higher costs for building new power plants and a dip in investment income.

Revenue for the third quarter fell 13 percent to ⁈illion from ⁈illion in the third quarter 2008.

E.On said it expected its full-year net profit to decline less than previously anticipated. It now expects a drop of between 3 and 5 percent compared with its earlier forecast of a 5 to 10 percent decline. In 2008, the company reported full-year net income of ⁈llion on revenue of ⁈illion.

"We posted solid nine-month results in a year that has been characterized by the economic crisis," Chief Executive Wulf Bernotat said in his letter to shareholders.

"Although it looks like the worst part of the crisis is over, we continue to face significant adverse factors.

"Together with the streamlining of our portfolio and our successful efficiency enhancements, these investments will help create a solid platform from which E.On can start off strong when the current economic crisis ends," he said.

He said the company's efficiency program was progressing well and that it was continuing to streamline the portfolio, which is expected to contribute to the balance sheet.

On Tuesday, E.On said it sold its German extra high-voltage electricity transmission network to TenneT, a state-owned Dutch network operator, creating Europe's first cross-border power transmission network.

The sale of Transpower Stromuebertragungs GmbH should be finalized in early 2010 and is expected to be valued around ⁈ion depending on the financial situation of the unit closer to the end of this year.

Calyon Credit Agricole analysts said the sale will have two main positive effects — it will satisfy the European Commission's requirement to boost competition in German electrical markets and increases the company's amount of targeted disposals of some ⁈lion by the end of 2010 to ⁈llion.

Shares of E.On were 1.5 percent higher at ⁈in Frankfurt afternoon trading.

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On the Net:

http://www.eon.com