TECO Energy Inc. Reports Operating Results (10-Q)

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Aug 06, 2010
TECO Energy Inc. (TE, Financial) filed Quarterly Report for the period ended 2010-06-30.

Teco Energy Inc. has a market cap of $3.63 billion; its shares were traded at around $16.96 with a P/E ratio of 13.3 and P/S ratio of 1.1. The dividend yield of Teco Energy Inc. stocks is 4.8%. Teco Energy Inc. had an annual average earning growth of 1.7% over the past 5 years.TE is in the portfolios of David Dreman of Dreman Value Management, Brian Rogers of T Rowe Price Equity Income Fund, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

TECO Energy, Inc. reported second quarter net income attributable to TECO Energy of $75.5 million or $0.35 per share, compared to $60.9 million or $0.29 per share in the second quarter of 2009. Results in the second quarter of 2010 were reduced by a $4.1 million charge related to early debt retirement completed in April.

Year-to-date net income and earnings per share were $131.3 million or $0.61 per share in 2010, compared to $95.6 million or $0.45 per share in the same period in 2009. Year-to-date results in 2010 were reduced by charges of $20.3 million for early debt retirement and $0.9 million for restructuring; results in the 2009 year-to-date period benefited from $5.1 million of net charges and gains, primarily the gain on the sale of the Guatemalan telecommunications provider, Navega.

Net income for the second quarter was $56.8 million, compared with $48.5 million for the same period in 2009. Results for the quarter reflected higher base rates effective in May 2009 and the 2010 portion of rates approved by the Florida Public Service Commission (FPSC) in December 2009. Results also reflected a 0.7% higher average number of customers, higher earnings on nitrogen oxide (NOx) control projects, and higher operations and maintenance expenses. Net income included $0.3 million of Allowance for Funds Used During Construction (AFUDC) - equity, which represents allowed equity cost capitalized to construction costs, related to the installation of the final NOx control project at the Big Bend Station, compared with $2.5 million in the 2009 period.

Total retail energy sales increased 2.0% in the second quarter of 2010, compared to the same period in 2009. Total degree days in Tampa Electric's service area were 12% above normal and 6% higher than in the second quarter of 2009. Pretax base revenue increased between $3 and $5 million from warmer spring weather in the second quarter of 2010, compared to the same period last year. Pretax base revenues increased between $13 and $17 million in the second quarter of 2010, due to the new base rates approved by the FPSC for Tampa Electric effective in May 2009 and January 2010.

Total degree days in Tampa Electric's service area were 20% above normal and 15% above the prior year-to-date period. Pretax base revenue increased between $18 and $25 million from favorable weather in 2010 compared to the same period last year. Pretax base revenues increased between $40 and $50 million in the 2010 year-to-date period due to the new base rates approved by the FPSC for Tampa Electric effective in May 2009 and January 2010.

Peoples Gas reported net income of $23.0 million for the year-to-date period, compared to $15.8 million in the same period in 2009. Results reflect a 0.4% higher average number of customers. Residential customer usage increased due to colder first quarter winter weather in 2010. Pretax base revenues increased approximately $10 million due to the unusually cold winter weather and approximately $5 million due to the higher base rates which became effective in June 2009. Increased sales to commercial and industrial customers reflect the colder-than-normal winter weather, the return to service of several higher volume customers that were idle in the 2009 period and generally higher usage by those customers. Gas transported for power generation customers increased over the 2009 year-to-date period due to higher power demand in the first quarter. Non-fuel operations and maintenance expense increased, due to the same factors as in the second quarter.

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