Dynegy (NYSE:DYN) narrowed its second-quarter loss amid cost cutting measures and increased efficiency as the power generator continued to revamp operations, though its profit still missed expectations.
The Houston-based seller of electricity booked a net loss of $116 million, or 95 cents a share, compared with a year-ago loss of $191 million, or $1.59 a share, in the same quarter last year.
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Analysts polled by Thomson Reuters had been expecting an even narrower loss of 49 cents.
During the period, gains from higher generation volumes in its Midwest region and lower operating expenses in its Midwest and West regions were more than offset by lower realized prices and generation volumes across all regions, particularly impacting operations in the Northeast and West.
Our operating units turned in an excellent performance during the quarter, said newly appointed Dynegy CEO Robert Flexon. A prerequisite to our successful restructuring is the continued safe, reliable, and in compliance operations of our plants while reducing our cost structure.
Two months after initially electing a slate of seven new board members to service until next years annual meeting, a new management team was appointed to lead the companys financial restructuring, including Flexon, chief operating officer Kevin Howell, chief financial officer Clint Freeland, and chief administrative officer Carolyn Burke.
The move is part of restructuring plans announced in July to realign its power generation facilities by fuel type. Through steps taken on August 5, the company reorganized its operations into three segments: gas, coal and other.
Dynegy Power now owns and operates the gas segment, a portfolio of eight primarily natural gas-fired intermediate and peaking power generation facilities. Dynegy Midwest Generation now owns the coal segment, which is made up of six coal-fired baseload power generation facilities.
Earlier this month, the company also completed two refinancing transactions that together are valued at about $1.7 billion for new senior secured credit facilities that will support the realigned organization structure.
Dynegy said it has initiated actions to further reduce costs and improved its operating performance in an effort to drive its bottom line.
By the end of the year, the company predicts it will have a general and administrative expense annual run rate below $105 million and operating expenses at about $420 million. Last year, the company booked general expenses of $163 million and operating expenses of $450 million.
In 2012, the company expects an even further improvement of about $50 million.