Calpine Doubles Earnings, Beats Forecasts

Calpine Corp., one of the biggest U.S. power-plant builders, said Thursday that second-quarter earnings more than doubled, beating estimates, because of higher electricity prices in California and sales from new plants.

Profit from operations rose to $132.2 million, or 39 cents a share, from net income of $59.5 million, or 20 cents, a year earlier. Revenue almost quadrupled to $1.61 billion.

San Jose-based Calpine opened plants in the U.S. with a combined capacity of 1,545 megawatts--enough to light 1.5 million average homes--and benefited from existing plants in California. Calpine has insulated itself from rising fuel costs by buying natural-gas fields to supply its plants.

“Given the strategy they have chosen, they’re following through quite well,” said Andre Meade, an analyst at Commerzbank Capital Markets Co. “They are growing from a small base and adding a lot of plants, so we’d expect high growth.”

Profit topped the 31-cent average estimate of analysts surveyed by First Call/Thomson Financial. Calpine said it expects to earn $2 a share this year. The average First Call forecast was $1.92, with a range of $1.80 to $2.04.

Calpine’s shares rose $1.08, or 3%, to close at $36.89 on the New York Stock Exchange.

The shares had fallen 21% this year amid concern that generators might have to give back some of the profit they made selling power in California during the last year. In addition, cooler-than-normal weather and conservation efforts recently reduced power prices in the state.

Calpine runs or is building natural gas plants in 29 U.S. states and Canada that produce more than 30,000 megawatts of power. The company plans to more than double capacity to 70,000 megawatts by the end of 2005.

Calpine this month opened the $350-million Sutter plant, California’s first major generator in more than a decade. The company is building 11 plants to run during times of peak demand in the state and getting permits for four more, James Macias, who oversees Calpine’s West Coast power plants, said in a conference call with analysts and investors.

Separately, Arlington, Va.-based AES Corp., a power producer that supplies California and operates in 27 countries, said second-quarter profit fell 20% because of losses tied to currency fluctuations and the sale of a U.S. electricity retailer.

Net income fell to $112 million, or 21 cents a share, from $140 million, or 28 cents, a year earlier. Sales rose 26% to $2.21 billion.