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

conference calls and in follow-up conversations with analysts and in formal presentations and break-
out sessions at the conferences, they stated:
• For the 2ndQ 01, Enron reported outstanding results including a 40% increase in
net income to $404 million versus $289 million a year ago and a 32% increase in
diluted earnings per share to $.45 compared to $.34 a year ago. As the numbers
show, Enron's energy business fundamentals were excellent.
• Enron had confidence in achieving EPS for the full year 01 of $1.80 and $2.15 per
share for 02. Enron was expressing its confidence, strong confidence in the
remainder of this year and next year given the business prospects that it saw on the
horizon.
• The EES business was poised to expand rapidly with commensurate increases in
profitability. Enron was firmly on track to achieve its 01 target of $225 million of
IBIT in its retail business. So, the retail business had a great, great quarter as
well.
• Broadband services reported $102 million IBIT loss in the 2ndQ compared to a
loss of $8 million a year ago. This quarter's loss reflects significantly lower
revenues but comparable operating expenses as compared it to the prior period.
Industry conditions in the broadband area were very weak. Luckily, Enron's
strategy of minimizing the amount of hard assets allowed it to significantly reduce
costs to be more in line with the revenue opportunities that were in the industry.
Enron's focus going forward would be in the intermediation area.
• In bandwidth intermediation, Enron was making good progress, continued good
progress in creating a market for bandwidth. Enron had completed over 759
transactions in the 2ndQ, which was a 31% increase over the 1stQ of this year.
Enron also increased its customer base during the quarter with the addition of 45
new customers for a total of 165 customers.
• Overall, a great quarter. 2ndQ results were outstanding. Business fundamentals
remained strong. Enron's new businesses were expanding and adding to its
earnings power and Enron was well positioned for future growth.
• Enron's projected EPS for 01 was $1.80 – a 22% increase on the prior year.
Enron expected EPS to be continuing to grow at that kind of rate.
• The earnings guidance Enron was giving was that it believed that 22% this year
looks very good and it could continue that kind of growth rate next year. That
would give investors some sense of Enron's confidence from what it was seeing.
Enron's business was very strong.
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