Net Increased 30% in Enron s ~iIine Energy Trading ?±s Gave Profit Big Boost * Revenue Crew 75% * - By RERECtA SMITH St~sff flevofler of Tn WALl. Sur Jouusa - Huron Corp.'s transition from a natural- gas company to a racy provider of energy and, telecommunlcatlons services took a big. 1e4 forward in the second quarter.. H WIIbPIuUt getting a kick from an increase in deline energy trading. Ijouston-based Huron said its electric- it~~and natural-gas trading voibmes jumped by 40% in. the second quarter, help- lag to push net Income up by 30% to $289 million from $222 million a year earlier. Per-share earnings of 34 cents handily he$ already bullish anklyst timates pub- lb~d by First Calltrbomson Financial by lWfrcents a Share. A year earlier. Enron *U~~ fl cents a ~. * RevenpegrewTh%forthesecondquar- to SIUS billion frbm £9.67 billion.a earlier. In afternoon trading, Enron unchanged at $73 on the New Exchange. Analysts said stronggrowthin Enron's I] *eb-based tracing platform. EnronOn- inc. moved the whole company forward. tolume at EnronOnline, which trades some 800 contracts for commodities in dud- I~g oil, natural gas, electricity and tele- ~ommunications capacity, grew by 92% the first quarter and now ~ccotmts f Emon's total trading volume. "EnronOnline is In its hypergrowth stage." said Donato Essey~ gas analyst for Merrill Lynch dIcta! Securities, it seems Ak all the traders are using* it for. price discovery and to cut a deal" giving Enron. H~ Sure Enrnvs weeldy closing sine price 180 70 60 50 30 Sotnt Tradeiin.c~*n transaction fees as well as profits on gbods at fl~ unit is especially impres- sin, analysts said, since EnronOnline is just eight months old. In That time, traders have used It to execute more than 200,000 transactions with a face value exceeding $100 billion. Some of That business was taken away from competitors, but much of it represents new business stimulated, in part, by the ease of online trading. 'For the quarter, Huron's natural-gas hiding volumes jumped by 77% in North America . from a year earlier as power- plant owners moved to lock up fuel sup- plies in a rising-eost market. Analysts said the increase in gas volumes-in a suppos-: edly mhture market-showed the spillover impact of electric-industry deregulation and unease about gas-storAge leveli; which are lower this year thanlast. .,~,, r 2nd Quarter Enmnselectricity trading volumes in North Mn~rlca gret by 31%kfrom a year earlier, partly refi ectinglnervomness about dwindling electriclty~ reserves in many major markets and growing price Huron President Jeffrey I~lling said huge swings in energy prices do more than help the energy trading business. They also push big companies tn sip long- term pbwer-supply contracts with Huron's retail services nulL For the quarter, the unit signed contractk to supply $3.8 billion of energy and enerb services to cuatodi- ers. The unit produced a pretax profit of $24 milll6n for the quarter, compared with a $26 rhililon loss a year earlier, as It ramped up production. Although most customers continue to sign 10-year purchase conttacts, "we've seen more interest in fixed prices. as the. market has gotten more volatile." Mr. Shill- ing said. Contract pric~s..g~neralty have ranged from $40 to $130 p~r megawatt hour; be said, far above theE prices many analysts expected to see il~ deregulated markets. - Mr. Skilling said Enron's Eurnpean~ trading business showed gro~vth that stsr* prised him, principally in Germany and surrounding countries that iecently have liberalized their markets and are encour- aging bilateral energy tradiiig. Analysts said investors should expect greater volatility id Enron~ stock price - now that the company is inci~asingly per- ceived as a technology pla~'. Roughly a third of Huron's market value is attribut- able to EnronOnline and Enrdn Broadband Services, Its wast-to~coast telecommunica- tions unit that said this week it will deliver movies on demand .to home~ in partner- ship mtb Viacom Inc. unit' Blockbuster Inc. The remainder is Huron's more tradi- tional energy businesses, lbcludlng gas pipelines and generating plants. - Loop Sunk 4Fron By Staff Report. - WASHINt using a lega Medicaid sp a year. and asmore stat - 'big to feder the practice. Nnnsylv Nebraska ai ~ng I result In inc aid, the fed the poor an states have nancing Ad the program steps. -. Currentl3 thority to bI cording to k gress, the aj that would I At is a di! eral official. saying That gram. The ported-and aware, who vices Secret asking for tended top vulnerable; intended, to Components Combo fl ~~ig discuss a possible components combination. hem's what each ~w~~'y could gain r *tow&0takeinbigger compantits company with strong Wowth * Intel Nortels optical transmission systems * Scale, Coming must ~ow fast to match .ley competitors, especially £5 Lkiiphase *PIUdUCthUadUt Helps fiS Corning's goal of r becoming a one-stop shop for components * UraIn~wen Matching Coming's powei¶ul R&D with Nortel's would aid rapid gowib * HIgh price tag could lead to dilution of Corning's earnings * Mortal cefilpo ton could be reluctant to deal with Nortel/Comihg components business * Lofty stack valuatlolls could tumble if grovth expectations not met JA S 0 lID J F MAlI ins mm Possible Norzel-Corning Deal Could Con