Bloomberg News

CEZ Rises From Five-Month Low After Confirming Earnings Outlook

May 10, 2012

CEZ AS (CEZ) rose from its lowest in more than five months after the biggest power utility in the Czech Republic confirmed an earlier full-year profit forecast, overshadowing worse-than-expected quarterly profit.

The stock climbed 0.6 percent to 714.5 koruna by 12:06 p.m. in Prague, after tumbling 6.6 percent in the previous five days to its weakest price since November 2011. CEZ has lost 9.2 percent so far this year.

The company reiterated its 2012 target for net income of 41 billion koruna ($2.1 billion) and its plan to pay a dividend of 45 koruna per share. First-quarter net income of 14.4 billion koruna missed estimates and revenue rose 7 percent to 60.8 billion koruna, CEZ said today.

“While first-quarter results are overall slightly negative, CEZ has confirmed its full-year targets, which is often more important for investors than the quarterly data,” Josef Nemy, an analyst at Komercni Banka AS (KOMB) in Prague, wrote in a report today. “CEZ shares are undervalued in our view, but they keep being hurt by unfavorable trends in energy markets.”

Power for next-year delivery in Germany, where CEZ exports part of its output, has tumbled 6.4 percent so far this year. The futures contract rose 0.1 percent to 49.70 euros today, its second day of gains.

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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