Enron Corp. - University of California | Office of The President

Enron Energy Services – Reported EBIT of $40 million compared to a 6 million in
Q1/00. Revenues for this high-growth segment in the current quarter were $693
million, up from $314 million a year ago. Total contracting in the first quarter
increased to $5.9 billion....
Enron Broadband Energy Services – ... EBS has completed 580 transactions, which
represents more transaction than completed in all of 2000. Further there were 70
new customers who were added, bringing the total to 120.
324. As Enron and its bankers flooded the market with very positive statements about
Enron's finances and business and after Enron reported better-than-expected 1stQ 01 results, Enron's
stock stabilized and increased in price to as high as $64-3/4 at the end of 4/01, as Enron and its
bankers continued to flood the securities markets with extremely bullish statements about the current
success of Enron's business and its future prospects – actually increasing the forecasts of Enron's
future revenue and earnings growth. But then, on 5/8-9/01, Enron stock again fell from $57-13/16
to $48-7/16 in two days, trading as low as $52 on 5/17 – below equity issuance target prices. Again,
Enron and its bankers rushed to support Enron's stock price.
325. On 5/18/01, JP Morgan issued a report on Enron. It rated Enron a "Buy," with a $120
price target, and increased Enron's forecasted 01 and 02 EPS to $1.77 and $2.08 and stated:
Enron Weakness Not Explainable Fundamentally; Reiterate Buy
* * *
We don't believe the recent slide of Enron's stock is based on fundamentals or a
negative catalyst, but rather a lack of willingness on the part of some investors to
believe in Enron's continued transformation and application of its business model.
The company has consistently delivered growth in its scale, reach, products and
capabilities across both the Energy and other sectors. We strongly believe that
Enron will continue to deliver, and don't view some persistent negative news flows
as capable of derailing strong performances by its businesses as a whole. We
reiterate our Buy rating and $120 12-month price target.
Enron's fortunes have certainly not peaked ... we believe the earnings power of the
company continues to grow.... [W]e are very confident that Enron is on track.
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