AES Corp., an Arlington-based global power company, posted a third-quarter loss yesterday because of a slump in Brazil's currency and lower energy prices. The company also warned that it might default on some of its debt by December if its refinancing plans aren't successful.
AES lost $314 million (58 cents per share) on revenue of $2.14 billion. In the year-earlier quarter, AES reported net income of $3 million (1 cent) on revenue of $1.85 billion. Losses from currency transactions in South America widened to $182 million, from $82 million last year. After-tax losses on transactions involving the Brazilian real alone amounted to $203 million.
AES will probably default on a $384 million bond payment due Dec. 15 unless it succeeds with a refinancing plan announced earlier this month, chief executive Paul T. Hanrahan said in a conference call with analysts and investors. Default "is close," he said.
AES is negotiating with its bondholders and banks to restructure its debt.
The company wants to redeem $500 million in unsecured debt for cash and secured debt and get $1.6 billion in secured bank credit to replace debt maturing next year, all efforts to keep more cash available as the company navigates stormy power markets in the next few years.
"It's critically important for AES to complete this rollover-and-exchange offer," Hanrahan said.
AES, like other electricity producers, continued to be hit by the slump in wholesale power. The price the company obtained for the power it generates fell in California, New York and Argentina as well as in Britain, AES said.
The company has reported three straight quarterly losses, and its stock is down more than 90 percent this year.
Shares of AES closed yesterday at $1.28, down 6 cents.
In June, Hanrahan replaced co-founder Dennis W. Bakke, who had spent more than $21 billion on acquisitions. Hanrahan cut costs, promised to sell $800 million in assets this year, and vowed to halt capital spending and expansion until the company's bonds trade at face value.
About $17.4 billion of AES's $23.2 billion in debt is held by its operating subsidiaries worldwide and isn't a liability of the holding company.
* Corporate Office Properties Trust, a Columbia-based real estate developer, said its third-quarter profit was $6.2 million (15 cents per share) on revenue of $38.7 million. The company earned $5.2 million (16 cents) on revenue of $32.8 million in the year-earlier period.
Funds from operations rose 17.7 percent in the quarter, to $13 million from $11 million. Funds from operations is the standard measure of performance for real estate companies.
Corporate Office's portfolio, as of Sept. 30, included 111 office properties totaling 9 million square feet. The space was 94 percent occupied and 94.4 percent leased last month, the company said.
* Pepco Holdings Inc., the Washington-based holding company created from the recent merger of Potomac Electric Power Co. and Conectiv, said it earned $115.2 million (80 cents per share) on revenue of $1.64 billion in the third quarter.
In the same quarter of 2001, the former Pepco earned $68.7 million (64 cents) on revenue of $720 million.
Comparisons with the most recent quarter, though, aren't meaningful because the year-earlier quarter did not include Conectiv.
The company said all of its electric utility and competitive energy businesses were profitable in the three months ended Sept. 30.
* United Defense Industries, an Arlington defense contractor, said it swung to a profit during its third quarter, getting a boost from a recent acquisition and upgrades to Army tankers.
The company, which is 49 percent-owned by the Carlyle Group venture capital firm, reported net income of $45.1 million (85 cents per share), compared with a loss of $18.1 million (42 cents) in the 2001 quarter.
Revenue jumped 93 percent, to $529.7 million, from $275.1 million.
Much of the increase was related to the company's recent acquisition of U.S. Marine Repair (USMR), formerly owned by Carlyle. USMR added $105.7 million in quarterly revenue.
Army upgrades to Bradley Fighting Vehicles added $69 million more.
Its acquisition of USMR was seen as key to United Defense's growth after the Pentagon canceled its $11 billion Crusader artillery program.
The program accounted for more than 20 percent of United Defense's revenue. Shares of the company closed at $22, up $1.35.
* Southern Financial Bancorp Inc., a Warrenton, Va., holding company with bank branches in Northern Virginia, said it earned $2.7 million (57 cents per share) in the third quarter, compared with net income of $2.3 million (65 cents) in the year-earlier period.
Per-share net income declined because of the issuance of more common stock in October 2001 and a recent stock merger.
The company attributed the rise in earnings to loan growth and higher fee income.