TECO Energy Beats – Analyst Blog

TECO Energy Inc. (TE) reported earnings per share from continuing operations of 34 cents for the first quarter of 2010, exceeding the Zacks Consensus Estimate of 25 cents. First quarter 2010 GAAP results were impacted by charges of $16.2 million for early debt retirement and $0.9 million for restructuring.

 

Total revenues in the quarter were $912 million, up 10.6% year over year.

 

 

For Tampa Electric, net income for the first quarter was $48.1 million, compared with $18.3 million for the year-ago period. One of the most significant drivers for the quarter was the abnormally cold weather experience throughout Florida. It was the coldest winter in Tampa in over 40 years. Results for the quarter also reflected higher base rates effective May 2009 and the 2010 portion of rates approved by the FPSC in December, and lower operations and maintenance expenses.

 

Peoples Gas reported net income of $17.9 million for the first quarter, compared with $11.2 million in the first quarter of fiscal 2009. The company estimates that the cold weather added about $10 million to base revenues and the base rate increase added about $1 million in the first quarter. The rates approved in 2009 have a higher fixed component, but a lower volume related charges. Quarterly results reflect a 0.2% higher average number of customers primarily due to winter seasonal residents.

 

TECO Coal reported first quarter net income of $16.8 million, compared with $8.0 million in the same period in 2009. TECO Coal’s results for the quarter were well above the last year, reflecting higher selling prices across all products and the benefit of the $3.3 million settlement of state income tax issue. Sales volumes were slightly lower at 2.1 million tons compared with 2.3 million tons in the first quarter of 2009. Results reflected an average net per-ton selling price, excluding transportation allowances, of more than $76 per ton, almost 10% higher than in 2009.

 

TECO Guatemala reported first quarter net income of $10.4 million in 2010, compared with $13.2 million in the 2009 period. TECO Guatemala’s first quarter 2009 non-GAAP results of $4.5 million excluded the $8.7 million gain from the sale of the telecommunications service provider, Navega, which was sold in the first quarter of 2009. TECO Guatemala was able to make spot sales from the San José plant throughout the quarter at good margins, primarily due to higher residual oil prices, which set the market clearing price for spot sales.

 

 

In the first quarter, TECO Energy and TECO Finance tendered for, purchased and retired a total of $300 million of 7.00% and 7.20% notes, and TECO Finance issued $250 million of 4.00% notes due in 2016 and $300 million of 5.15% notes due in 2020. In April 2010, TECO Energy redeemed all of its $100 million of its outstanding floating rate notes due in May 2010 and $100 million of its 7.20% notes due in 2011.

 

 

TECO Energy is maintaining its 2010 earnings per share guidance range of $1.20 to $1.35, excluding charges and gains.

 

Tampa Electric and Peoples Gas are expected to realize the full year benefit of the 2009 base rate increases implemented in 2009.

 

The forecast for Tampa Electric and Peoples Gas assumes normal weather for the remainder of the year.

 

Due to the current strong markets for metallurgical and pulverized coal injection (PCI) coals, TECO Coal now expects its sales in 2010 to be near the upper end of the previously provided production sales range of 8.3 to 8.7 million tons.

 

TECO Guatemala expects improved operating and financial performance at the San José Power Station following the extended unplanned outages in 2009, and higher contract capacity payments, which are expected to increase as the 12-month rolling average availability factor improves.

 

TECO Energy Inc. is an energy-related holding company. Its principal subsidiary, Tampa Electric Company, is a regulated utility in Florida with both electric and gas divisions (Tampa Electric and Peoples Gas System). Other subsidiaries include TECO Coal, which owns and operates coal production facilities in Kentucky and Virginia, and TECO Guatemala, which is engaged in electric power generation and distribution and energy-related businesses in Guatemala.