Chile's largest power generator, Empresa Nacional de Electricidad SA (EOC, ENDESA.SN), saw third-quarter net profit fall to 143.0 billion Chilean pesos ($289.2 million) from CLP177.9 billion last year, the company reported Wednesday.

The company attributed the steep drop in profit, which was roughly in line with analysts' expectations, to increased spot-energy purchases in Chile as hydroelectric production was reduced, lower selling prices for energy in Chile, and higher fuel costs in Argentina.

"What weighed most heavily on Endesa's bottom line was that it had to use more thermal generation, as cheaper hydroelectric generation was reduced," said Jorge Donoso, senior energy analyst with investment bank Larrain Vial.

Sales for the three month period ending in September increased to CLP663.0 billion, from CLP613.7 billion in the comparative year-ago period.

Endesa, through its operations in Argentina, Chile, Colombia and Peru, has an installed capacity of 13,864 megawatts, with 57.6% coming from hydroelectric generation, 41.8% from coal, gas or diesel, and the remainder from wind.

The power generator, which has a 9.1% weighting on the blue-chip Ipsa index, saw shares rise 1.7%, to CLP873.35, as the company also announced an upcoming dividend payment. Its shares have traded at a low of CLP767.62 and a high of CLP924.73 over the last 52 weeks, while gaining 2.9% over the same period.

Endesa is owned by the Chilean energy holding company Enersis SA (ENI, ENERSIS.SN), which in turn is owned by Spain's Endesa SA (ELEZF, ELE.MC).

-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929; anthony.esposito@dowjones.com