Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Red Electrica Advances on Softer Blow From Reforms: Madrid Mover

July 15 (Bloomberg) -- Red Electrica Corp. SA, Spain’s electricity network operator, rose the most in three months in Madrid trading on speculation that national power-market reforms won’t harm sales as much as estimated.

The company forecast revenue from its transmission business of 1.6 billion euros ($2.1 billion) next year, according to a filing today. While that’s about 130 million euros less than analysts had estimated, they’d previously expected a reduction of 150 million euros, JPMorgan & Chase Co. said in a note.

Red Electrica jumped as much as 4.7 percent, the biggest intraday gain since April 10, and was up 1.7 percent at 39 euros as of 1:33 p.m. local time. The stock slumped 7.5 percent on July 12 after Spain’s government announced measures to cap earnings from power distribution.

Prime Minister Mariano Rajoy is working to eliminate a deficit in power-utility finances after successive governments forced generators to sell electricity to consumers at below the cost of production. The grid’s distribution unit will be limited to a rate of return on investment of 6.5 percent, while consumers’ power bills will rise, the government said last week.

Today’s statement from Red Electrica “will eliminate the debate about substantially larger reductions in revenues near-term,” Javier Garrido, a JPMorgan analyst with an overweight recommendation on the stock, said in the note. “While we await more details on the definitive regulatory framework, today’s statement should help limit the downside risk for the stock.”

To contact the reporter on this story: Patricia Laya in Madrid at

To contact the editor responsible for this story: David Risser at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.