Today is my wife's birthday. The kids and I bought her several things that we hope she'll like. But don't hold your breath waiting for me to tell you what they were. Why? Well, first, I don't really know you yet. And second, I'm embarrassed to say that none of our gifts could measure up to a Texas-sized purchase of shares of Motley Fool Income Investor pick TXU (NYSE:TXU).

At first glance, the results from the Dallas utility might look a little too much like a weeks-old fruitcake that got stuck in a warehouse in Idaho on the way to grandma's place. (I know: Ewwwwww.) A net loss of $626 million, or $2.32 per share, for the fourth quarter? Yep, I know what you're thinking: "Come on, pal. You want to come over and kick my dog, too?"

Ah, but look between the lines, dear Fool. That massive loss includes $288 million from discontinued operations. Take that out, and remove more than $500 million in restructuring charges, and you come up with $183 million, or $0.67 per share, in profits from ongoing businesses. That's more than 400% higher than the $34 million, or $0.11 per share, the company booked in operating income during 2003's fourth quarter.

Yet those numbers, great though they are, don't even come close to being my favorite part of the earnings announcement. Nope, I like management's guidance for 2005 better. That's because per-share operating profits are expected to rise at least 100% while operating cash flow is anticipated to be more than 40% higher.

The company also gave a free-cash-flow projection, but I prefer to calculate owner earnings each quarter with reported numbers, allowing for closer scrutiny of one-time items. Still, growth is growth, and a 40% jump in available cash flow means more for share repurchases and debt reduction, and management has targeted both as high priorities. Such a leap also leaves ample room for dividend growth, otherwise known as the income investor's best friend.

Waxing enthusiastic on the report, Income Investor chief analyst Mathew Emmert said TXU easily bested his per-share estimates, and its performance raised his projection of a fair valuation for the stock. He advises current and interested investors to buy on price fluctuations. I couldn't agree more. After all, cash gushers like the one spewing forth from TXU's headquarters don't come along very often in the stock market. Tapping the shares here might be a good way to juice a portfolio in need.

For related Foolishness:

  • TXU is another of the many stocks that could energize your portfolio.
  • Fellow Fool Ben McClure first identified the TXU turnaround in October.
  • Don't you think market-beating dividends like TXU's 3.13% payout are easy to love? Me, too.

TXU has already generated double-digit returns for Motley Fool Income Investor subscribers. Want in on the action? No problem. Take a free, 30-day trial today.

Fool contributor Tim Beyers doesn't own shares in any of the companies mentioned. But don't let that deter you. You can find out more about TXU by mixing it up with other Fools at the TXU and Energy & Utilities discussion boards. You can also see what's in Tim's portfolio by checking out his Fool profile. The Motley Fool has a disclosure policy.