RRI Energy Surges Despite Difficult Quarter

HOUSTON (TheStreet) -- RRI Energy(RRI Quote), formerly known as Reliant Energy, reported that it boosted its profit by well over 100% in the second quarter.

Great news! Or ... not.

In truth, all of the gains came from discontinued operations. In May, the company completed the sale of its Texas-based retail operations to NRG Energy(NRG Quote).

Without that, the Houston-based energy concern swung to a loss due to those same twin factors that bit most of the energy sector in the second quarter: nose-diving demand and slumping commodity prices.

RRI Energy reported profit surged to $803.6 million, or $2.29 per share, from $358.7 million, or $1.01 per share, from the year-earlier period. But after excluding discontinued operations, the company posted a $185.3 million loss, or 30 cents a share, compared to income of $143.9 million, or 23 cents per share, last year.

On average, analysts surveyed by Thomson Reuters thought the company would report a 27-cent per share loss.

Revenues, which stood at $1.01 billion in last year's second quarter, plummeted 62% to land at $389.8 million this quarter. Still, that top-line is better than the $359.3 million in sales that most analysts had forecast.

"We have taken steps to manage the challenges of the difficult economic environment and position us to benefit as market conditions improve," CEO Mark Jacobs said in a press release. "The sale of the retail business significantly reduced our risk profile and we implemented a modest hedging program to provide a high probability of achieving free cash flow break-even or better in 2010 and 2011 even if market conditions deteriorate further."

After the opening bell, RRI Energy shares were rising 5.2%, or 28 cents, at $5.63.

-- Reported by Sung Moss in New York.