Enel SpA topped expectations as expanding operations overseas more than offset lower domestic production and the costs of the international shopping spree but its first-half earnings were flat.
Enel, which is part of a joint bid for Spain's Endesa SA, said its net profit for the first six months of 2007 was EUR1.98 billion (US$2.69 billion) - beating the forecast of analysts polled by Dow Jones Newswires, who forecast earnings of EUR1.87 billion (US$2.54 billion).
Earnings before interest, taxes, depreciation and amortization, the figure closely watched by analysts, was EUR4.46 billion (US$6.06 billion) in the January-June period, up 2.3 percent from Ђ4.36 billion. Revenue fell to EUR18.86 billion (US$25.63 billion) from EUR19.07 billion.
Chief Executive Fulvio Conti said Enel expected its full-year results to exceed last year's, based on expansion overseas and increased efficiency in its Italian operations.
"Enel has transformed itself into a multinational energy company," Conti said in a statement.
Enel last year bought a 30 percent stake in Russian wholesale generation company JSC OGK-5 and plans to buy the remaining 70 percent. Enel's tender with Acciona for Endesa, which values the Madrid-based utility at EUR42.5 billion (US$57.75 billion), expires Oct. 1.
Both deals have contributed to a surge in debt, which more than doubled to EUR25.07 billion (US$34.07 billion) as of June 30 from EUR11.69 billion on Dec. 31.
Conti said the Spanish and Russian deals "complete" the utility's international expansion.
Enel shares gained 0.6 percent to EUR7.39 (US$10.04) on the Milan stock exchange.
The Russian Ministry of Defense showed a video of the destruction of US-made M777 towed howitzers in Ukraine. The US systems were destroyed by the Russian Kub (Cube) kamikaze drone