By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- German utility E.On AG said on Wednesday its net profit rose sharply in 2009 thanks to asset disposal gains, adding that it expects earnings to remain stable this year.
Net income rose to 8.39 billion euros ($11.4 billion) last year from 1.28 billion euros in 2008. Sales dropped 6% to 81.8 billion euros, due to lower prices in the gas wholesale business and lower gas sales volume.
Analysts polled by Dow Jones Newswires expected net profit of 7.08 billion euros and revenue of 83.95 billion euros.
Adjusted net income, the key figure E.On /quotes/comstock/11e!feoan (DE:EOAN 23.25, -0.26, -1.09%) uses to calculate its dividend payout, fell 5% to 5.33 billion euros. The firm will maintain its dividend of 1.50 euros per share.
"Despite the absence of roughly 1 billion euros in earnings streams due to asset disposals," E.On expects its 2010 adjusted earnings before interest and taxes to be between zero and three percent above the prior-year level.
Adjusted net income in 2010 is projected to be in line with the previous year.
Shares of E.On rose 0.9% in late morning trading on Xetra in Germany. They are down 1% over the past three months, but have gained 40% over the past 12 months.
E.On was the most actively traded stock in the blue-chip DAX index /quotes/comstock/30p!dax (DX:DAX 6,194, +29.99, +0.49%) , which was last up 0.2%.
Analysts at CA Cheuvreux said E.On's adjusted pre-tax earnings and adjusted net income fell short of market expectations.
Also, the firm expects adjusted net income to remain stable, which is below the consensus expectation of 2.2% growth, according to Cheuvreux.
"We thus regard both the results as well as the outlook as disappointing and therefore stick to our underperform recommendation," the analysts said in a note to clients.
Polya Lesova is reporter for MarketWatch, based in Frankfurt.
