TECO Energy reports thirteen percent higher earnings per share for the second quarter
TAMPA, July 15, 1998
TECO Energy, Inc. (NYSE/TE) today reported second quarter earnings of $.44 per share, up 13 percent from last year's second quarter results of $.39 per share (which included $.02 per share of merger-related costs). Net income was $57.9 million for the quarter, compared to $50.5 million last year.
Year-to-date net income totaled $110.9 million, or $0.84 per share, compared to 1997 year-to-date earnings of $101.3 million, or $0.78 per share. The 1998 results include a net after-tax gain of $22.2 million from the disposition of discontinued oil and gas operations, partially offset by non-recurring after-tax charges of $16.8 million recorded in the first quarter. Income from continuing operations, before the first quarter charges and net gain, totaled $105.5 million compared to the 1997 total of $104.6 million, before merger costs.
Chairman and Chief Executive Officer Girard F. Anderson said, "We achieved strong second quarter earnings, helped primarily by effective cost management and by electric company revenues resulting from the extreme warm weather in June. We are also pleased with the progress we continue to make in growing our businesses."
Second Quarter Results
Tampa Electric reported second quarter electric revenues of $321 million, including recognition of $11.1 million of previously deferred revenues, compared to $300 million in 1997, when $9.8 million of deferred revenues were recognized. Operating income for the quarter was $80.2 million, compared to $72.5 million in 1997. Earnings for the quarter were impacted favorably by the recent warm weather, with retail sales up over five percent, and solid retail customer growth of 2.2 percent. Operations and maintenance expenses for the quarter were essentially the same as in 1997.
Peoples Gas System reported quarterly operating income of $4.7 million on revenues of $58 million, compared to 1997 second quarter operating income of $6.4 million on revenues of $57 million. 1998 operating income was affected by $1.6 million of costs associated with the company's previously announced decision to discontinue the appliance sales and service business. The company expects to recoup most of these costs by the end of the year and to realize significant cost savings going forward.
Second quarter unconsolidated operating income for TECO Energy's diversified businesses totaled $27.0 million, unchanged from 1997. Lower volumes at TECO Coal were offset by improved results at TECO Coalbed Methane and the Peoples Gas unregulated companies.
At TECO Transport, river volumes were up over last year from increased north-bound freight as well as from the river equipment added in the first quarter. However, temporary tow restrictions and lower rates offset the impact of the higher volumes, providing results that were in line with 1997. TECO Coal reported lower revenues and income as a result of the expected lower tonnage to Tampa Electric. TECO Coalbed Methane had increased income on higher prices resulting from hedging arrangements entered into earlier in the year. The income increases were somewhat offset by a normal, gradual decline in production, which is characteristic of these wells. Second quarter results from Peoples Gas' propane operations reflect growth in operating income, primarily from the recent acquisition of Griffis Gas as well as from pricing improvements in the current quarter.
Year-to-date operating income from the regulated electric operations of Tampa Electric increased to $136.4 million, up from $130.4 million in 1997. The 1998 results exclude the one-time charges recorded in the first quarter. Revenues for the period totaled $594 million, including deferred revenues of $19.8 million. This compares to revenues of $573 million and deferred revenues of $17.1 million for the same period in 1997. For the six month period, retail sales volumes were up three percent, with customer growth up over two percent.
Peoples Gas System contributed operating income of $20.1 million for the first six months, compared to $21.0 million last year. Base revenues were up seven percent, reflecting strong growth. However, higher expenses along with the costs associated with discontinuing the appliance sales and service business led to a reduction in operating income.
Year-to-date results from TECO's diversified companies reflect unconsolidated operating income from continuing operations of $53.3 million, compared to $54.6 million last year. The 1998 results exclude the one-time charges at TECO Coal and TeCom recorded in the first quarter. Current year results reflect revenue growth and improved pricing in the propane business as well as continued growth at TECO Transport, which was offset by TECO Coal's decline in operating income resulting from reduced tonnage to Tampa Electric. TECO Coalbed Methane also reported lower year-to-date operating income, primarily because of lower average gas prices than in 1997 and lower production, as previously described.
Current year consolidated net income includes one-time after-tax charges totaling $16.8 million which included a charge at Tampa Electric related to the separation of certain wholesale power contracts, asset value adjustments at TECO Coal and the write-off of product development costs at TeCom associated with InterLane® residential system features developed early in the product life and no longer incorporated in the current system's design. Consolidated net income for 1998 includes a first quarter net gain from discontinued operations totaling $22.2 million reflecting the sale of offshore oil and gas assets. Consolidated net income for 1997 included $3.3 million in one-time merger-related after-tax charges associated with the Peoples Gas merger.
TECO Energy is a diversified energy-related holding company headquartered in Tampa. Its principal businesses are Tampa Electric, Peoples Gas, TECO Transport, TECO Coal, , TECO Coalbed Methane, TECO Power Services, and Bosek, Gibson and Associates.
|Summary information (as of June 30):|
|Three months ended||Six months ended||Twelve months ended|
except per share amounts)
|Revenues||$ 490.6||$ 460.9||$ 958.4||$ 911.2||$ 1,909.3||$ 1,809.5|
|Net income from continuing operations||$ 57.9||$ 50.5||$ 88.7||$ 101.3||$ 198.9||$ 217.3|
|Net income (loss) from discontinued operations||$ --||$ --||$ --||$ --||$ (6.5)||$ --|
|Gain (loss) on disposal of discontinued operations||$ --||$ --||$ --||$ --||$ 19.2||$ --|
|Net income||$ 57.9||$ 50.5||$ 110.9||$ 101.3||$ 211.6||$ 217.3|
|Earnings per share from continuing operations - basic||$ .44||$ .39||$ .67||$ .78||$ 1.51||$ 1.67|
|Earnings per share from continuing operations - diluted||$ .44||$ .39||$ .67||$ .77||$ 1.51||$ 1.67|
|Earnings per share - basic||$ .44||$ .39||$ .84||$ .78||$ 1.61||$ 1.67|
|Earnings per share - diluted||$ .44||$ .39||$ .84||$ .77||$ 1.61||$ 1.67|
outstanding - basic
outstanding - diluted