Looking ahead, the Houston company also cut its earnings forecast for the year by about 30 per cent. Its worse-than-expected results are likely to spur further cost cuts. "I want to assure you that no one on this management team is satisfied with these results," Joel Staff, Reliant Resources' newly appointed chief executive, said in a conference call with analysts and investors. Staff also hinted that the company may be facing layoffs in the coming months. as it moves to cut its costs. The company has 2,971 full-time employees and 4,352 contract workers. "During the next weeks and months we will be involved in critically evaluating all areas of our costs and capital structure and moving, where appropriate, to reduce those costs, improve the capital structure and reposition the company to realize its full potential," Staff said. He declined to elaborate on whether the company might be facing layoffs but said the cost evaluation will be a top priority. Reliant Resources said it expects 2003 income from continuing operations to be between 50 cents and 70 cents per share, down from a previous range of $1 to 80 cents per share. Analysts were expecting the company to earn 81 cents per share for the year, according to estimates compiled by Thomson First Call. In trading Thursday after the early morning announcement, its shares closed down 49 cents at $5.22. The first-quarter net loss includes a $384 million charge against earnings related to the sale of its Dutch power business. Reliant agreed in February to sell the business to Nuon, a Nether-lands-based electricity distributor. Reliant Resources' 2003 first-quarter loss also reflected a decline in wholesale earnings because of lower trading margins, the company said, including a trading loss of $80 million. The losses were partially offset by a reversal of California-related reserves and earnings from Reliant's retail electric operations in Texas, the company said. Reliant Resources negotiated a $6.2 billion financing package in late March that it needed to avoid filing for bankruptcy. The financing was completed three days after the deadline for a $2.9 billion debt payment. The new financing package has stabilized the company and enabled Reliant Resources to address other issues, such as the resolution of legal and regulatory matters facing the company, Staff said. Reliant Resources reported a first-quarter net loss of $462.4 million, or $1.59 per share, on revenues of $2.6 billion. That compared with a net loss of $137.4 million, or 48 cents per share, on revenues of $1.6 billion in the first quarter of 2002. Excluding one-time items, Reliant had a loss from continuing operations of $56 million, or 19 cents per share. That was deeper than analysts had expected. Wall Street was looking for the company to post a loss of 7 cents per share from ongoing operations, according to estimates compiled by Thomson First Call. The quarterly results also included an accrual of $47 million for a payment due to CenterPoint Energy in 2004 as required under Texas deregulation legislation. Texas deregulation law requires an affiliated retail electric provider to make a payment in 2004, not to exceed $150 per customer, if 40 percent of the residential and small commercial customers in the affiliated transmission and distribution utility's service territory have not switched to an alternative electric provider by year's end. The company's retail energy segment produced first-quarter operating earnings of $23 million compared with $46 million in the first quarter of 2002. The wholesale energy segment reported an operating loss of $10 million in the first quarter of 2003 compared with operating earnings of $115 million in the first quarter of 2002.

Its worse-than-expected results are likely to spur further cost cuts.

"I want to assure you that no one on this management team is satisfied with these results," Joel Staff, Reliant Resources' newly appointed chief executive, said in a conference call with analysts and investors.

Staff also hinted that the company may be facing layoffs in the coming months. as it moves to cut its costs. The company has 2,971 full-time employees and 4,352 contract workers.

"During the next weeks and months we will be involved in critically evaluating all areas of our costs and capital structure and moving, where appropriate, to reduce those costs, improve the capital structure and reposition the company to realize its full potential," Staff said.

He declined to elaborate on whether the company might be facing layoffs but said the cost evaluation will be a top priority.

Reliant Resources said it expects 2003 income from continuing operations to be between 50 cents and 70 cents per share, down from a previous range of $1 to 80 cents per share.

Analysts were expecting the company to earn 81 cents per share for the year, according to estimates compiled by Thomson First Call.

In trading Thursday after the early morning announcement, its shares closed down 49 cents at $5.22.

The first-quarter net loss includes a $384 million charge against earnings related to the sale of its Dutch power business. Reliant agreed in February to sell the business to Nuon, a Nether-lands-based electricity distributor.

Reliant Resources' 2003 first-quarter loss also reflected a decline in wholesale earnings because of lower trading margins, the company said, including a trading loss of $80 million.

The losses were partially offset by a reversal of California-related reserves and earnings from Reliant's retail electric operations in Texas, the company said.

Reliant Resources negotiated a $6.2 billion financing package in late March that it needed to avoid filing for bankruptcy.

The financing was completed three days after the deadline for a $2.9 billion debt payment.

The new financing package has stabilized the company and enabled Reliant Resources to address other issues, such as the resolution of legal and regulatory matters facing the company, Staff said.

Reliant Resources reported a first-quarter net loss of $462.4 million, or $1.59 per share, on revenues of $2.6 billion.

That compared with a net loss of $137.4 million, or 48 cents per share, on revenues of $1.6 billion in the first quarter of 2002.

Excluding one-time items, Reliant had a loss from continuing operations of $56 million, or 19 cents per share.

That was deeper than analysts had expected.

Wall Street was looking for the company to post a loss of 7 cents per share from ongoing operations, according to estimates compiled by Thomson First Call.

The quarterly results also included an accrual of $47 million for a payment due to CenterPoint Energy in 2004 as required under Texas deregulation legislation.

Texas deregulation law requires an affiliated retail electric provider to make a payment in 2004, not to exceed $150 per customer, if 40 percent of the residential and small commercial customers in the affiliated transmission and distribution utility's service territory have not switched to an alternative electric provider by year's end.

The company's retail energy segment produced first-quarter operating earnings of $23 million compared with $46 million in the first quarter of 2002.

The wholesale energy segment reported an operating loss of $10 million in the first quarter of 2003 compared with operating earnings of $115 million in the first quarter of 2002.