Teco Energy Inc.
) announced first quarter 2012 earnings of 24 cents per share, flat
with the year-ago quarter. Earnings in the current quarter
fell short the Zacks Consensus Estimate of 25 cents.
The modest earnings performance can be attributed to margin
expansion from Teco Coal, offset by lower customer demand at the
electric and natural gas segments due to warmer winter weather.
Pro forma and GAAP earnings remained the same, owing to the
absence of one-time items.
Teco Energy posted revenue of $730.0 million in the first
quarter of 2012, down 8.3% from $796.1 million in the year-ago
quarter. This was due to a decline in electric sales from the
company's unregulated division.
Reported revenue missed the Zacks Consensus Estimate of $775.0
declined due to a 26.2% fall in weather-sensitive household
customers, which was partially offset by a 12.4% surge in total
thermal sales resulting from increase in gas transportation to
power generation consumers.
's sales volume in the reported quarter declined to 1.4 million ton
from 2.1 million tons in the year-ago period. However, during the
quarter the company experienced a growth in the sales price of per
ton. The average selling price per ton was $96 in the first quarter
compared with $81 in the prior year quarter.
On the international front,
experienced marginal sales increase caused by increased prices and
lower operating expenses which were partially compensated by lower
contract and spot energy sales.
Lower revenue at
was due to weak residential demand, which declined 12.4% owing to a
warmer winter, partially mitigated by higher industrial volume and
energy sales of 3.4%.
Total operating expenses fell in the first quarter by 9.0% to
$604.8 million from $665.2 million in the year-ago quarter. This
was backed by a fall in fuel costs by 8.6% and a massive decline in
cost of natural gas sold by 49.2%.
Total operating income slipped 4.3% to $125.2 million from
$130.9 million in the prior-year quarter.
Interest expenses declined to $50.6 million from $52.8 million
in the year-ago quarter owing to a lower debt level.
Cash and cash equivalents as of March 31, 2012 were $59.0
million versus $44.0 million as of December 31, 2011.
Cash flow from operating activities during the quarter was
$223.9 million compared with $229.9 million in the previous year
Long-term debt as of March 31, 2012 was $3923.2 million versus
$4035.3 million as December 31, 2011.
Teco Energy increased earnings expectation at the lower-end to
$1.30-$1.40 per share from $1.25-$1.40 per share in the year-ago
quarter. This upward anticipation is buoyed by enhanced performance
by the company's various regulated and unregulated business
Teco Coal forecasts sales volume to be between $7.0 million and
$7.3 million. The average price is expected to be around $96 per
ton over the rest of the year on account of rise in metallurgical
The company anticipates cost of production in the range of $83
to $87 per ton.
Wisconsin Energy Corporation
) announced first quarter 2012 earnings of 74 cents per share
versus 72 cents in the year-ago quarter, indicating growth of 2.7%.
Earnings in the reported quarter surpassed the Zacks Consensus
Total revenue in the first quarter was $1.19 billion, down 10.5%
from $1.33 billion in the year-ago quarter. Revenue missed the
Zacks Consensus Estimate of $1.29 billion.
Despite modest earnings performance in the first quarter, we
believe customer growth of 1% and 0.9% year over year at Tampa
Electric and Peoples Gas, respectively, would act as positive
catalysts to the company's growth.
On the flip side, inconsistent weather, a delayed recovery of
Florida's economy and the possibility of lower coal demand in 2012
could act as inhibiting factors for the company.
Based in Tampa, Florida the company is involved in regulated
utility operations. Through its subsidiaries it generates,
transmits, distributes, purchases and sells electric energy in
Florida and Guatemala.
Teco Energy Inc. holds a Zacks #4 Rank which translates into a
Sell rating. We recommend a Neutral rating in the long run.
TECO ENERGY (TE): Free Stock Analysis Report
WISC ENERGY CP (WEC): Free Stock Analysis
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