TECO Energy Inc.
) has decided to totally exit from its international operation in
Guatemala. TECO Guatemala has entered into agreements to sell its
equity interests in the Alborada and San Jose power stations and
related solid fuel handling and port facilities in Guatemala for
TECO's Guatemalan assets will be purchased by Sur Electrica Holding
Ltd. ("SUR") and Renewable Energy Investments Guatemala Ltd.
We consider this divestment to be a strategic move by the company
which would enable TECO to re-focus on its domestic operations. The
proceeds from the sale will go to repay $25 million of San José
Power Station project debt while the balance will be utilized in
share repurchases and reduction in debt at the parent company.
The decision to repurchase shares and lower the debt level will
have a positive impact on the company's financials going forward.
TECO's earnings from continued operations for full year 2012 are
now expected in the range of $1.10 to $1.20 per share.
We believe the asset divestment programs are aimed at improving
TECO's financials. The company has missed our earnings expectation
in the last three quarters mainly due to the ongoing depression in
steam coal markets.
The Zacks Consensus Estimates for the third quarter and full year
2012 are presently at 38 cents and $1.19 per share, respectively.
TECO Energy currently retains a short-term Zacks #5 Rank (Strong
Sell rating). We rather prefer its Zacks #3 Rank (Hold rating)
GenOn Energy, Inc.
Based in Tampa, Florida, TECO Energy is involved in the generation,
purchase, transmission, distribution, and sale of electric energy
in Florida. With a market capitalization of $3.79 billion, the
company has 4,290 full time employees.
GENON ENERGY (GEN): Free Stock Analysis Report
TECO ENERGY (TE): Free Stock Analysis Report
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