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UPDATE 2-E.ON H1 profit beats forecasts on U.S., trading

Published 08/12/2009, 04:13 AM
Updated 08/12/2009, 04:19 AM

* Opg profit falls 1 percent to 5.7 bln eur

* Reuters poll average was 5.5 bln eur

* E.ON tweaks 2009 net profit outlook higher

* Shares rise 3.45 percent, outperforming market

(Adds shares, earnings abroad)

By Peter Dinkloh

FRANKFURT, Aug 12 (Reuters) - E.ON, the world's largest utility, on Wednesday reported earnings that beat market forecasts, helped by higher profits from household customers in the United States and its pan-European energy trading unit.

The German power provider joined major European peers such as France's EDF, Italy's Enel and Britain's International Power in surprising investors with better-than-expected results.

A number of European utilities have benefited from strong earnings abroad while lower demand due to the economic crisis and higher fuel costs has pressured margins in their home markets.

E.ON also tweaked its 2009 outlook higher, saying it now sees net income falling 5 to 10 percent rather than 10 percent as interest payments and taxes will be lower than expected.

The German utility's adjusted earnings before interest and taxes (EBIT) dropped 1 percent to 5.7 billion euros ($8.1 billion) in the first six months of the year, beating a 5.5 billion euro average of estimates from 14 analysts in a Reuters poll. It said its still sees 2009 EBIT unchanged from 2008.

Shares in the nine-year-old utility rose 3.5 percent to 26.70 euros at 0808 GMT, the strongest riser on a DJ Stoxx utilities index that gained 1.1 percent and on a little-changed German benchmark DAX.

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PLAYING CATCH-UP

E.ON is trying to catch up with competitors as it struggles to earn money from 18 billion euros worth of acquisitions made in Italy, Spain and Russia, raise its profitability to the level of its peers and improve the performance of its shares.

Its stock has dropped 33 percent in the past 12 months, while the DJ Stoxx utilities dropped 30 percent and DAX 17 percent.

The power provider trades at 9.2 times estimated earnings per share for the coming 12 months, the seventh lowest valuation among 33 European peers according to Thomson Reuters StarMine, which weights analysts estimates according to their track record.

E.ON said on Monday its deputy chief executive, Johannes Teyssen, would take charge of the company from May 2010.

German peer RWE is due to report first-half earnings on Thursday and GDF Suez on Aug. 27.

(Editing by John Stonestreet)

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