Enel SpA (ENEL.MI) Thursday confirmed its targets for 2012, but said first-quarter net profit fell 1.4% on the year, hit by a tax targeting the energy sector and as the effects of a recession slashed electricity demand in its two biggest markets Italy and Spain.

Rome-based Enel said first-quarter net profit dropped to EUR1.18 billion from EUR1.20 billion in the first three months of last year, while revenue added 8.5% to EUR21.19 billion. Earnings before interest, tax, depreciation and amortization, or Ebitda, shed 2.2% at EUR4.30 billion over the same period.

The former Italian utility monopoly's earnings were lifted by the gains from a sale of its stake in power grid company Terna SpA (TRN.MI), announced in February. Excluding this sale, Enel said net profit, excluding special items such as the Terna share sale, would have slipped 15% on the year to EUR1.0 billion.

The results slightly beat a Dow Jones Newswires survey of six analysts, which estimated average net profit at EUR1.05 billion and Ebitda--a figure closely watched by analysts to determine the health of the underlying business--of EUR4.20 billion.

Enel has spent the last few years focusing on servicing a huge debt pile amassed after its 2007 takeover of Spanish rival Endesa SA (ELE.MC). At the same time it has been grappling with lower demand for electricity during the continent's economic slowdown, and there is a weaker appetite for development of nuclear energy, which Enel had hoped to expand, as a result of last year's Fukushima nuclear crisis in Japan.

Enel has scheduled a conference call at 1600 GMT to comment the results. Investors will be looking out for comments on implementation of the roughly-EUR27 billion capital expenditure plan for 2012-2016 presented in March.

Enel shares ended up 2.1% to EUR2.48, giving it a market capitalization of EUR22.83 billion. The share slightly outperformed Italy's benchmark FTSE Mib Index.

-By Liam Moloney, Dow Jones Newswires; +39 06 6976 6924; liam.moloney@dowjones.com

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