TECO Energy Inc.
) announced third-quarter 2013 operating earnings of 30 cents per
share, below the Zacks Consensus Estimate of 32 cents. Earnings
were also 28.6% below the year-ago figure. The decline reflects
lower energy sales and higher operations and maintenance
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Total revenue at TECO Energy at the end of the third quarter was
$765.9 million, missing the Zacks Consensus Estimate of $817.0
million. The top line declined 10.8% year over year. The decline
reflects lower sales to residential, commercial and industrial
Total operating expenses declined 7.4% year over year to $625.4
million due to lower fuel and purchased power costs.
Segment net income was $68.7 million, down from $73.5 million in
the year-ago quarter. The decline reflects lower energy sales,
higher depreciation and operations and maintenance expenses and
lower earnings on assets recovered through the Environmental Cost
Recovery Clause due to a Florida Public Service Commission rule
revising the return on investment calculation with effect from
Jan 1, 2013. However, these negatives were partially offset by
lower interest expense.
Segment net income was down 22.9% year over year to $5.4 million.
The significant decline reflects higher non-fuel operations and
maintenance expense partially offset by lower interest expense.
Segment loss was $1.4 million compared to a profit of $1.5
million during the prior-year period.
Cash and cash equivalents of the company as of Sep 30, 2013, were
$152.8 million, down from $200.5 million as of Dec 31, 2012.
Capital expenditure in the reported quarter was $121.3 million,
up from $114.3 million spent in the third quarter of 2012.
Cash flow from operating activities during the quarter was $62.8
million, up from $44.0 million during the prior-year period.
TECO Energy maintained its 2013 earnings per share expectation in
the range of 90 cents to $1.00.
Peoples Gas expects to earn above the mid-point of its allowed
return on equity (ROE) range of 9.75% to 11.75%. The segment
expects to benefit from moderate customer growth and customer
switching from other sources of fuel to natural gas.
Tampa Electric expects the year-to-date trend of customer growth
to continue but cautioned that sales growth will be lower than
the increase in customer count. This is primarily due to lower
average customer usage.
At the Peer
American Electric Power Company Inc.
) reported third quarter 2013 operating earnings of $1.10 per
share, beating the Zacks Consensus Estimate of $1.08 by 1.9%. The
quarterly figure also improved 7.8% from the year-ago profit
level of $1.02. This improved performance reflects positive
returns from the investments made in the company's regulated
TECO Energy's top and bottom line failed to meet the Zacks
Consensus Estimate. Also, revenue and earnings declined year over
year. The downside reflects lower electric and gas sales. Going
forward, regulatory hurdles for underground coal mines,
fluctuating commodity prices, and fluctuations in energy demand
due to a variance in weather conditions are matters of concern.
However, the approval of Tampa Electric's base rate request
provides strong visibility to the company's earnings stream over
the next four years. TECO Energy currently has a Zacks Rank #3
Stocks that look better positioned are
NRG Yield, Inc.
UNS Energy Corp.
), both with a Zacks Rank #1 (Strong Buy).