TECO Energy Inc.
) announced its fourth-quarter 2012 operating earnings of 21
cents per share, in line with the Zacks Consensus Estimate. The
results of the company were however slightly lower than 22 cents
reported in the year-ago quarter.
Teco Energy's operating earnings for 2012 were $1.14 per share
falling short of the Zacks Consensus Estimate by 4.2% and the
year-ago earnings by 2.6%.
GAAP and operating earnings per share during the reported
quarter were the same owing to the absence of one-time items.
For 2012, GAAP earnings stood at 99 cents per share compared
with $1.27 per share in 2011.The difference between full year
GAAP and operating earnings of 15 cents was due to a loss
incurred from discontinued operations.
Total revenue at TECO Energy in the fourth quarter was $688.4
million versus $720.0 million in the year-ago period, reflecting
a decline of 4.4%. The year-over-year revenue decline was mainly
due to a lower contribution from its unregulated business.
During the fourth quarter, coal sales plunged 24.05% year over
year which hurt revenue. Despite a combined 2.8% expansion in the
customer base from Tampa Electric and People Gas, the mild
weather compared to the previous year impacted the results
Reported quarter revenue missed the Zacks Consensus Estimate
of $698 million.
Total revenue for 2012 dropped 6.6% to $2,996.6 million from
$3,209.9 million in the prior year.
Full year 2012 revenue also fell below the Zacks Consensus
Estimate by $168.4 million.
Full-year 2012 gas as well coal sales also presented a similar
picture declining 12% and 16.9% respectively, year over year.
This was due to slackness in the U.S. coal market which led to
idling of some mining operations and lower natural gas
Although the joint customer base for Tampa Electric and People
Gas rose by 2.4% from the prior-year level, sales plummeted from
the residential and commercial segments, with industrial
customers being the only exception.
Total expenses, during the quarter and full year fell 3.3% and
7.1%, respectively, year over year, on account of decline in fuel
and power purchase costs. However, depreciation and amortization
expenses climbed 5.5% in the quarter and 4.2% in 2012.
The decline in revenue more than offset the impact of the fall
in cost. This resulted in operating income to decrease 9.3% to
$109.5 million from $120.8 million in the year-ago quarter.
Interest charges during the fourth quarter decreased to $43.3
million from $48.8 million in the year-ago quarter due to lower
long-term debt interest rates.
Cash and cash equivalents of the company as of Dec 31, 2012,
were $200.5 million versus $44.0 million as of Dec 31, 2011.
Capital expenditure at the end of 2012 was $149.9 million,
representing a reduction of $5.9 million from the 2011 level of
Cash flow from operating activities during the quarter stood
at $149.1 million versus $82.5 million in the year-ago
TECO Energy expects earnings per share for 2013 to range
between 90 cents and $1.00 per share. The company expects retail
energy sales to increase at a slower pace than the customer rise
in 2013 owing to decline in average consumer usage.
It anticipates sales to be lower for industrial phosphate
consumers in 2013 and costs to rise steeply. Tampa Electric is
expected to earn an allowed return on equity in the range 10.25%
People Gas is expected to earn an allowed return on equity in
the range of 9.75% to 11.75%. Teco Coal has contracted 90% of its
estimated 2013 sales of 5.2-5.7 million tons.
Moreover, average sales price across all products are
projected to be over $86 per ton. Total cost of production is
expected to be between $81 and $85 per ton attributable to a
reduction in mining costs, royalty payments and severance
Other Utility Company Releases
NextEra Energy Inc.
) reported operating earnings of $1.03 per share in the fourth
quarter, coming below the Zacks Consensus Estimate by 7 cents.
Dominion Resources Inc.
) reported earnings of 69 cents in the fourth quarter, surpassing
the Zacks Consensus Estimate by a penny.
Teco Energy hived its loss-making Guatemala assets in Dec
2012. The company intends to utilize the proceeds in the
development of its core operations.
The positive comeback of the coal market in the near term
should provide a lift to Teco Energy's coal business. Moreover,
an expected increase in natural gas prices will offer encouraging
prospects in the upcoming quarters. This will be backed by the
improving Florida economy. The company intends to strengthen its
operation to serve the consumers in a better manner.
However, weather variations and unplanned outages are risks
the company needs to watch out for. Teco Energy currently retains
a Zacks Rank #3 (Hold). Another Zacks Ranked #1 (Strong Buy)
) financial results have yet to be released.
Based in Tampa, FL, TECO Energy is involved in the generation,
purchase, transmission, distribution, and sale of electric energy
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