* Q1 EBITDA 3.58 bln euros vs 3.43 bln in Rtrs poll
* Q1 underlying net income 1.39 euros vs 1.31 bln in Rtrs
* Shares indicated 0.5 pct higher
(Adds details on European market, shares, background)
FRANKFURT, May 8 E.ON, Germany's
biggest utility, said on Wednesday first-quarter core earnings
fell 5 percent, blaming weak energy consumption and low
electricity prices in its main market Europe.
First-quarter earnings before interest, tax, depreciation
and amortisation (EBITDA) dropped to 3.58 billion euros ($4.68
billion), slightly higher than the 3.43 billion euros average
forecast in a Reuters poll.
"The economic situation of our legacy business in Europe,
particularly in conventional power generation, remains
difficult," Chief Executive Johannes Teyssen said in a letter to
E.ON made about 45 percent of its 2012 core profit in
Europe, excluding Russia.
Sluggish energy demand in Europe has troubled the
continent's utilities for years. The benchmark German contract
for baseload power delivery in 2014 is down about 30
percent since the end of 2010.
German utilities have been dealt an additional blow by the
country's decision to exit nuclear power 2022 as well as the
rise of renewables, presenting E.ON, RWE and EnBW
with a challenge to find new areas of growth outside
In 2012, nuclear power accounted for more than a fifth of
E.ON's power generation, while oil and natural gas had a 34
Low wholesale prices have also hurt E.ON's fleet of gas
plants, effectively forcing it to buy gas at higher prices than
it can charge customers.
Its gas plants have come under additional pressure from the
strong expansion of renewables, as power from solar and wind
sources takes priority in being fed into the electricity grid,
reducing the hours gas plants can run.
E.ON had already confirmed its 2013 outlook at its annual
general meeting last week, expecting EBITDA to fall to 9.2-9.8
billion euros this year, down from 10.8 billion in 2012.
($1 = 0.7642 euros)
(Reporting by Christoph Steitz; Editing by Maria Sheahan and