fw enron departure core business takes toll performance original message issuealert scientech com mailto issuealert scientech com sent monday october 22 2001 1 36 pm issuealerthtml listserv scientech com subject enron departure core business takes toll performance today issuealert sponsors scientech currently interviewing 1 500 utilities cis crm customer care united states canada determine leading software providers drivers utility technology decisions analysis license sales versus asp sales new market opportunities growing shrinking software markets download sample prospectus introduction new survey contact jon brock 505 244 7607 details miss last week catch latest deregulation competition restructuring developments energy industry scientech issueswatch october 22 2001 enron departure core business takes toll performance mcnamara director electric industry analysis news item reuters enron corp nyse ene stock sustained heavy losses october 19 investor confidence former wall street favorite remained low ebb reported first quarterly loss four years energy giant stock 3 32 11 45 percent 25 68 per share mid day trade oct 19 making cumulative loss 28 percent week reported third quarter loss 638 million early morning trading oct 22 enron shares priced 21 99 reflection new developments including new securities exchange inquiry caused uncertainty company among investors analysis enron first financial report since departure former ceo jeffrey skilling august done much instill investor confidence company experienced one turbulent years recent memory skilling cited personal reasons departure many analysts suspected significant drop enron share price financial losses diversified businesses also played role time skilling departure enron stock tumbled 52 week low however based new 3 q report appears enron downward turn may continuing despite return kenneth lay company top spot essence enron financial problems caused businesses company established way diversify core focus wholesale power sales appears enron learning costly lesson namely investors responding favorably company innovation especially bottom line performance way compromised road ahead may remain uncertain enron good number unresolved issues new securities exchange commission sec inquiry financial dealings chief financial officer continue overshadow company let first establish financial losses enron reported third quarter noted whole company reported 638 million losses taking 1 01 billion charges associated several non core businesses break losses becomes clear enron struggling operations three businesses water broadband retail power market specifically enron reported 287 million charges azurix water wastewater business 180 million charges related downsizing broadband operations including severance costs losses inventory sales customer contracts 544 million company calling investment losses evidently half 544 million figure related enron investment newpower company retail electricity natural gas provider enron launched two years ago partners america online ibm enron owns 45 percent newpower addition enron debt total capitalization ratio reportedly increase 50 percent although lay says pending asset sales may reduce amount 40 percent end 2002 however important note enron 3 q recurring net income write offs increase 35 percent 393 million 43 cents diluted share revenue quarter rose 47 6 billion 30 billion 3 q 2000 losses associated newpower particularly interesting one leading investors company enron drove newpower aggressive business focus retail residential power sales despite ongoing concerns development retail competition across united states newpower went public last year opening price 21 early days initial public offering trading price however company stock experienced devastating drop value currently priced 1 25 newpower scheduled release 3 q financial statement early november expected company continue incur significant losses foreseeable future specifically newpower recently reiterated earlier expectations 3 q loss 65 million 70 million 1 12 1 20 share third quarter revenue reportedly slightly lower 60 million 65 million company forecast august analyzing newpower 2 q financial losses see issuealert 8 8 01 www scientech com rci argued company really struggling mix positive negative factors efforts become leading retail energy provider residential small business markets united states positive side newpower recently secured large number new customer accounts significantly purchase customers related assets aes corp dte energy purchases prompted impressive growth spurt newpower company reportedly customer base 22 markets 10 states however bad news newpower losses continue widen apparently resulting combination weather factors financial hits absorbed several states company operates dichotomy appear getting better company stock continued drop result effort alleviate financial woes newpower recently revised existing master netting agreement enron corp several subsidiaries revised agreement essentially lowers amount cash collateral newpower required post enron subsidiaries jan 4 2002 lowered financial obligations must make enron newpower believes sufficient financial resources conduct business near term secures ongoing asset based financing however enron perspective losses associated newpower token losses water broadband contributed steady drop stock price message clear businesses enron plunged way diversify tainted company whole analysts perceived brash hubris enron part translated measurable profits consequently wall street reacted sending enron stock level half year ago individual sectors enron pursued unique share common denominator taking enron away successful core business similar enron aggressively sunk large sums capital new business lines arguably unrealistic expectations growth problem enron bandwidth unit company faced unanticipated excess fiber optic lines prevented demand division services materializing anticipated problem azurix losing money since formation 1998 privatization water sector materialized quickly enron companies anticipated addition problem areas enron also faces challenges related investments india locked legal battle state government california enron yet receive full payment previous power sales addition losses outlined 3 q report new issues brewing start week first sec requested enron provide information regarding certain related party transactions much additional information presently available inquiry however probably connected earlier reports concerns related dealings enron chief financial officer andrew fastow recently run limited partnership bought assets enron ken lay said enron cooperate fully sec request separate development several mutual funds including aim constellation held large positions enron either liquidated reduced holdings company weakened enron stock value portfolio managers mutual funds cited concerns enron ability balance new businesses core strength energy trader present challenge enron convince investors company remains solid ground despite losses thus lay quick reiterate earnings company energy gas pipeline business still strong lay says charges reported third quarter seen way clear away issues clouded performance earnings potential core energy businesses nevertheless fact remains enron invested huge amounts money toward diversification effort addition water broadband company invested steel pulp paper sectors well thus several questions remain juncture losses reported third quarter temporary setback enron clear way company return primary focus core business energy trading losses continue fourth quarter 2002 moving forward enron reshape business model eliminate various businesses investors reacted less favorably time tell industry continues watch developments enron clearly company midst another wave change archive list previous issuealerts available www scientech com encourage readers contact us comments look forward hearing nancy 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