Electric utility Teco Energy, Inc. (TE) Friday reported a sharp rise in fourth-quarter profit, driven by lower one-time charges and expenses. Total revenues declined from last year, reflecting lower regulated electric and gas revenue. Teco also provided an adjusted earnings outlook for fiscal 2010.
The company reported fourth-quarter net income of $53.5 million or $0.25 per share, compared to $22 million or $0.10 per share last year and $64.8 million or $0.30 per share in the sequential third quarter.
Teco said results for the fourth quarter of 2009 were reduced by $0.4 million of restructuring charges. Included in the year-ago fourth quarter results were $20.3 million of net charges and gains, primarily taxes on the repatriation of cash and investments from Guatemala.
On a non-GAAP basis, the company's net income rose to $53.9 million from $42.3 million in the same quarter a year earlier.
On average, 9 analysts polled by Thomson Reuters expected the company to report earnings of $0.25 per share for the quarter. Analysts' estimates typically exclude special items.
Teco's quarterly revenues declined to $765 million from $770.3 million in the prior-year quarter. Four analysts had a consensus revenue estimate of $906.03 million. In the previous quarter, the company had reported revenues of $896.3 million.
Regulated electric and gas revenue was $613.1 million, lower than last year's $625.9 million. Unregulated revenue rose to $151.9 million from $144.4 million in the previous year.
Total expenses declined to $645.6 million from $681.8 million in the previous year.
Based on business segments, Tampa Electric revenues increased to $502.7 million from $481.8 million in the previous year. Net income was $39.1 million, compared with $28.9 million for the same period in 2008. Results for the quarter reflected higher base rates approved by the FPSC in March, higher retail energy sales, a higher average number of customers, the first increase in the number of customers since the second quarter of 2008, and higher operations and maintenance expenses.
Tampa Electric's average number of customers increased 0.2% in the fourth quarter, driven by improvements in the Florida housing market and stabilizing economic conditions.
Peoples Gas revenues reached $113.7 million, down from $144.5 million a year ago. Net income rose to $12.7 million from $9.2 million last year. Quarterly results reflected a 0.1% lower average number of customers due to the weak Florida housing market, decreased sales to residential customers due to mild December weather and increased sales to commercial customers due to several higher volume new customers and conversion of propane customers to natural gas.
Teco Coal revenue was $149.6 million, higher than last year's $142.1 million. Teco Coal also reported fourth-quarter net income of $7.5 million, compared to $2.6 million in the prior-year quarter. Sales were 1.9 million tons in the quarter, down from 2.3 million tons in the fourth quarter of 2008. The quarterly results reflected an average net per-ton selling price excluding transportation allowances of more than $73 per ton, almost 22% higher than the previous year.
Teco Guatemala recorded quarterly revenues of $2.3 million, in line with the prior-year quarter. Net income was $9.4 million, compared to a net loss of $0.2 million a year earlier.
For fiscal 2009, Teco posted net income of $213.9 million or $1.00 per share, up from $162.4 million or $0.77 per share in the previous year. Non-GAAP net income from continuing operations rose to $230 million from $183.3 million in fiscal 2008. The company's full-year revenues rose to $3.31 billion from $3.38 billion in the previous year. Wall Street analysts projected full-year profit of $1.08 per share on revenues of $3.45 billion.
Among rivals, FPL Group, Inc. (FPL) reported a decline in profit for the fourth quarter, primarily reflecting challenges at its subsidiary NextEra Energy Resources. The Juno Beach, Florida-based company's net income for the fourth quarter declined to $349 million or $0.85 per share from $408 million or $1.01 per share in the previous year. Revenue for the quarter was $3.66 billion, down from $4 billion in the prior year quarter.
Southern Co. (SO) announced last month that its fourth-quarter profit was higher than last year, helped by lower non-fuel operations and maintenance costs, increased monthly service charges and revenues related to recovery of investments in environmental equipment. The Atlanta, Georgia-based company reported earnings after dividends on preferred and preference stock of $251 million or $0.31 per share, an increase from $186 million or $0.24 per share in the same period a year ago. Total revenues were $3.51 billion, up from $3.80 billion in the fourth quarter of last year.
Another peer, Progress Energy Inc. (PGN) is set to announce its fourth-quarter results on February 11. Wall Street analysts are looking for December quarter earnings of $0.50 per share on revenues of $2.08 billion.
Going forward, Teco expects fiscal 2010 earnings per share in the range of $1.20 - $1.35, excluding all charges and gains. Analysts expect the company to earn $1.31 per share for the fiscal year 2010.
The company said that Tampa Electric and Peoples Gas will have the full year benefit of the 2009 base rate increases implemented in 2009. Teco also assumes normal weather for the full year. The outlook and timing for a Florida economic recovery remains uncertain due to high unemployment and the weak housing market. Teco Coal's sales are expected to be between 8.3 million tons and 8.7 million tons.
"We're seeing some early signs of an economic recovery in Florida, particularly in the housing market, but we expect 2010 to be another challenging year for the State's economy. Our unregulated coal and Guatemalan operations are well-positioned to deliver improved results in 2010 as a result of their 2009 efforts," said Sherrill Hudson, Teco Energy's Chairman and Chief Executive Officer.
TE is trading at $15.10, down $0.07, on a volume of 770,605 shares.
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