thestreet com trade winds blowing enron south trade winds blowing enron south peter eavis senior columnist 08 30 2001 02 45 pm edt url enron ene nyse news commentary appears relying asset sales offset weakness high profile energy trading operation billion dollar sale power plants likely made hefty contribution energy giant second quarter profits supposed owe rapid growth company well publicized trading acumen smaller sale impaired assets affiliate company also may helped nudge second quarter numbers past wall street earnings estimates one energy market source alleges price tag deal inflated complicating matters enron financials make difficult determine exactly much deals may contributed earnings part enron flatly denies used one time gains meet estimates price impaired assets sale inflated dependence asset sales would mark big step backwards houston based enron long told investors trading future shrewdly capturing dominant position nation fast growing energy market enron expanded trading profits exponentially last couple years operating earnings trading surged 160 2000 1 6 billion causing stock double chatter enron swashbuckling traders caught second quarter unexpected drop prices power energy commodities addition company booked large loss broadband unit asset sales repeated trading income weakens earnings could crater observers say could pull enron already battered stock even lower fact fear enron prodigious profits growth sustained chief reason stock price dropped half year factors contributed well investor dissatisfaction enron opaque confusing financial statements risen throughout year earlier month ceo jeff skilling quit six months job skilling departure sparked sorts dark theories real reason sudden move enron chairman ken lay reassumed ceo post said week aims improve enron disclosure moved allay concerns top level instability promoting two experienced enron executives positions president also vacated skilling vice chairman skeptics remain unconvinced think second quarter performance bad trading operations covered asset sales says mark roberts director research wall street cambridge mass based stock analysis firm underwriting wall street issued critical report enron may quarter enron made 45 cents share 3 cents analysts expected details details one transaction investors want details sale enron north america three gas fired power plants allegheny energy supply unit allegheny energy aye nyse news commentary hagerstown md deal took place may price 1 05 billion according allegheny recent securities exchange commission disclosures allegheny declined comment deal enron second quarter earnings got huge boost sale three called peaker plants says roberts believes gain sale may high 500 million energy company analyst wall street brokerage thinks may closer 300 million firm done recent underwriting enron enron financial statements specify size gain peakers called supply power demand strong company declines offer number saying gain figure hard isolate must netted gains losses contracts associated assets sold however enron public disclosure states proceeds sale included commodity sales services line far biggest contributor enron earnings producing 762 million operating profits second quarter problem firm trading profits also booked segment result investors know much quarter blowout commodity sales services earnings came peaker sale much straight trading roberts 500 million estimate correct trading may accounted 262 million second quarter operating profit partners indeed deal raising eyebrows sale june enron texas based assets used produce mtbe methyl tertiary butyl ether chemical compound added gasoline make burn efficiently assets sold 120 million one subsidiary enron another subsidiary called eott energy partners eot nyse news commentary chiefly marketer transporter crude oil gain sale would booked enron wholesale line issues deal plenty took place june 30 right end second quarter could construed sign enron pressed eott deal could include gain second quarter results question price enron took 440 million impairment charge mtbe assets end 1999 responding described time significant changes state federal rules regarding use mtbe environmental authorities believe mtbe dangerous substance claim mtbe content drinking water reached unacceptably high levels skeptics ask enron turn around 18 months massive impairment charge sell assets 120 million addition executive another energy company talked enron buying mtbe assets claims worth 50 million claims enron long trying sell around 150 million put bluntly enron stuff eott overpriced assets meet earnings expectations enron spokeswoman responds eott views buying assets expansion core business makes good business sense recent eott sec disclosure states eott audit committee made three directors employees officers enron affiliate well investment bank judged sale price fair however chairman audit committee daniel whitty director two enron subsidiaries declined comment deal person familiar enron business adds eott wanted get deal done end second quarter could include assets third quarter numbers person also says gain immaterial enron second quarter numbers since big difference fair value assets marked price sold important person insists 120 million price based assets sold eott also paying contract enron gives eott 10 years worth mtbe related business enron agreed retain price risk associated commodities involved mtbe production person states whatever case mtbe assets enron would go long way toward fulfilling lay promises glasnost breaking asset sale gains need put disclosure mouth concludes wall street roberts know companies market may misvaluing detox would like hear please send feedback peavis thestreet com keeping tsc editorial policy peter eavis short individual stocks also invest hedge funds private investment partnerships