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

• We reiterate our 2001 and 2002 EPS estimates of $1.80 and $2.15,
respectively.
* * *
Write-off of Under-Performing Non-Merchant Assets Rids Enron of Overhangs
In the third quarter, Enron took $1.01 billion in charges associated with several
under-performing, non-Merchant businesses, in addition to a $1.2 billion decrease
in their shareholders equity account.... Although these write-offs are significant and
may be interpreted negatively at face value, we view them as strongly positive in the
long-run, as they reflect the removal of several of the overhangs which have
affected the stock.
371. On 10/16/01, Bank America issued a report on Enron. The report continued to rate
Enron a "Strong Buy" and continued to forecast 01 and 02 EPS of $1.85 and $2.15, as well as a 17%
secular EPS growth rate for Enron. It also stated:
• Enron reported ongoing operating earnings of $0.43 per share, in line with
consensus and a penny above our expectations.
• As expected, several non-recurring charges were recorded during the quarter
to resolve disposition of and losses in non-core businesses totaling $1.01
billion after-tax. Including these charges, earnings for the quarter were
$(0.84) per diluted share.
• Earnings were driven by wholesale trading and marketing, natural gas
pipelines, and retail services. Management reiterated guidance for the year
of $1.80 and for FY02 of $2.15 per share.
372. On 10/17/01, CIBC issued a report on Enron. The report rated Enron a "Buy" and
continued to forecast 01 and 02 EPS of $1.80 and $2.15 for Enron. It also stated:
Enron met expectations despite lower contributions from regulated assets as
wholesale energy services delivered another quarter of solid performance. Enron
reported an increase in fully diluted EPS (recurring) of 26% to $0.43 per share, up
from $0.34 in Q3/00.
373. On 10/17/01, JP Morgan issued a report on Enron. The report continued to rate Enron
a "Buy" and continued to forecast 01 and 02 EPS of $1.82 and $2.17 for Enron. It also stated:
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