E.ON cautious for 2010 as gas weakness persists

GERMANY’S E.ON, the world’s largest utility by sales, yesterday joined rivals in a more cautious view of 2010 earnings as the financial crisis hit prices and demand.

Taking into account planned asset sales, E.ON said its adjusted earnings before interest and taxes might rise as much as three per cent in 2010 from €9.6bn (£8.7bn) in 2009.

The 10-year-old power and gas provider previously forecast adjusted EBIT of €11bn this year excluding divestments, representing a 10 per cent increase to its outlook for 2009 earnings.

Adjusted EBIT in 2009 dropped two per cent to €9.6bn, below market expectations.

European utilities are facing an unprecedented decline in demand for power that is hitting earnings and share prices. E.ON is valued 25 per cent lower then its European peers as it is exposed to a gas market marred by falling prices.