Germany's E.ON, the world's largest utility, reported first-quarter earnings rose 21%, helped by lower costs in the U.K. and new customers for its gas distribution business.
Adjusted earnings before interest and taxes (EBIT) in the three months through March rose to 3.32 billion euros ($4.50 billion) from 2.73 billion euros, the company said in a statement on Wednesday.
That was more than expected, with 13 analysts polled by Reuters on average forecasting EBIT of 2.95 billion euros.
"New supply contracts were concluded with large customers in Denmark, France, and Italy," it said, referring to its wholesale gas unit. Earnings in the U.K. rose "because of lower gas procurement costs."
Business in the first three months of the year also led E.ON, Germany's largest publicly-traded company, to raise its expectations for 2007. Net income will rise this year, it said, after previously saying it will rise only "slightly."
Net income will still -- as in previous years -- be "especially influenced" by the value of derivatives the company holds at the end of the year.
Net income in the first quarter rose 50% to 3.07 billion euros, over 1 billion euros more than estimated by analysts. Analysts expected on average net income of 1.9 billion euros, according to a Reuters poll.
Shares in E.ON were 1.2% higher at 112.36 euros, outperforming a 0.3% gain on the German blue-chip DAX index.