RWE AG, Germany's second-largest utility, posted an unexpected fourth-quarter loss after unplanned shutdowns at its Biblis nuclear power plants and forced reductions in transmission fees cut revenue.
The net loss was 168 million euros (US$249 million), compared with a profit of 1.76 billion euros a year earlier, according to Bloomberg News. Fourth- quarter net was derived by subtracting the Essen-based company's nine-month earnings from full-year results published yesterday.
Analysts surveyed by Bloomberg had predicted a profit. RWE's Biblis A and B reactors were shut to fix faulty screw anchors. Sales were also hurt by a government-ordered cut in how much money the utility could charge competitors to ship electricity on its grid. Chief Executive Officer Juergen Grossmann, who took over on October 1, announced a stock buyback and higher dividend two days ago to boost shareholder returns.
"The results came in below our expectations and below the expectations of the market," said Peter Wirtz, a Dusseldorf- based analyst at WestLB Equity Markets who is reviewing his "buy" rating on RWE shares. "I don't see any major surprises to compensate for that."
The stock dropped as much as 4.68 euros, or 5.5 percent, to 80.40 euros, and traded at 80.60 euros in Frankfurt.
RWE's Biblis nuclear reactors halted in 2006 for repairs to screw anchors that didn't meet regulator specifications. The two plants, which have a combined capacity of more than 2,000 megawatts, have since been restarted.
"Significant adverse effects of German network regulation and the unplanned outage of the Biblis nuclear power plant" weighed on earnings, the company said.
RWE's profit in the year-earlier period was boosted by one- time gains from the sale of the company's Thames Water unit for 4.8 billion pounds (US$9.3 billion).
The median estimate of nine analysts surveyed by Bloomberg News was for fourth-quarter net income of 439 million euros.
Full-year profit was 2.66 billion euros, missing analysts' estimates of 3.25 billion euros.
