German utility RWE AG (RWE.XE), which is targeting Dutch peer Essent NV in a EUR9.3 billion takeover offer, Thursday reported above-expectations first-quarter results and reiterated it expects stable earnings in 2009.

RWE said it still expects earnings before interest, taxes, depreciation and amortization as well as operating profit to come in at the 2008 levels.

Recurrent net profit in 2009 is also expected to match the EUR3.37 billion achieved last year, Essen-based RWE said.

RWE also Thursday said net profit in the first quarter came in at EUR1.75 billion from EUR809 million a year earlier. The figure exceeded the EUR1.37 billion forecast by 16 analysts polled by Dow Jones Newswires.

Recurrent net profit adjusted for non-recurring items, such as last year's impairment charge of more than EUR600 million related to the initial public offering of its U.S.-based water unit American Water Works Co (AWK), came in at EUR1.51 billion from EUR1.42 billion a year earlier, exceeding the EUR1.44 billion forecast by 16 analysts polled by Dow Jones Newswires.

Operating profit rose 4.8% to EUR2.62 billion from EUR2.5 billion. Analysts had forecast EUR2.55 billion.

RWE said operating earnings were driven by exceptionally high profit contributions from its trading business and gas midstream activities of RWE Supply & Trading.

Analysts said the results demonstrate RWE is currently faring better through the economic crisis than competitor E.ON AG (EOAN.XE) which reported a 5% fall in operating profit Wednesday.

Still, RWE's result aren't quite as good as they look at first glance, said WestLB analyst Peter Wirtz, who rates RWE as neutral.

Wirtz said the power generation business performed slightly worse than expected due to lower electricity sales volumes reflecting weak demand in the recession.

He added that the RWE Supply & Trading result was boosted by the absence of a non-recurring effect related to the revaluation of gas derivatives used to hedge supply agreements. The revaluation reduced last year's first quarter result by around EUR110 million.

First-quarter sales rose more than 8% to EUR14.52 billion from EUR13.40 billion, above analysts forecast of EUR13.69 billion.

RWE's shares have lost around 25% in value over the past 12 months, outperforming its Dow Jones Euro Stoxx Utilities peer group. They closed Wednesday at EUR58.45.

Company Web site: www.rwe.com

-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com