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Strategies & Market Trends : Value Investing
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To: Jurgis Bekepuris who wrote (42682)5/17/2011 1:10:34 AM
From: Spekulatius  Read Replies (1) of 78645
 
Jurgis, are you sure your numbers are correct;
Per Y2010 annual report power generation in Germany generated ~52% of RWE operating earnings (P. 90). Nuclear power is ~18.5% of RWE's German operating capacity, so there is an almost 10% hit to RWE operating earnings, which I think will reduce net earnings by ~20% (fixed cost and debt payment stay the same, I also think that nuclear power generation profitability exceeds that of conventional generation).

RWE operating earnings are supposed to fall by ~20% and net earnings by about 30% The earnings projection of about 5.2 Euro/share for Y2012 seems a bit on the high side. RWE currently trades at ~42Euro/share so the PE is around 8, if these earnings in fact come through. So, I think that the very real earning hit is amply reflected in the share price already.

rwe.com
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