TECO Energy reports six percent higher earnings per share for the third quarter
TAMPA, October 15, 1998
TECO Energy, Inc. (NYSE/TE) today reported third quarter earnings from continuing operations of 54 cents per share, up six percent from last year's third quarter earnings from continuing operations of 51 cents per share. Net income from continuing operations was $70.8 million for the quarter, compared to $67.5 million last year. Net income for third quarter 1997, including the impact of discontinued oil and gas operations, was $59.3 million.
Year-to-date net income from continuing operations, excluding a one-time gain and charges, was $1.34 per share with net income of $176.3 million, compared to last year's results of $1.32 per share with net income of $172.2 million. Year-to-date net income, including a one-time gain and charges, was $181.7 million, compared to last year's net income of $160.6 million.
Chairman and Chief Executive Officer Girard F. Anderson said, "Our companies performed well this quarter. The strong Florida economy helped boost our electric and gas revenues, and our diversified companies showed good growth over last year. More importantly, our expansion initiatives during the year make us optimistic about long-term growth."
Third Quarter Results
Third quarter operating income from the company's diversified businesses was $31.7 million on revenues of $182.0 million, compared to $28.5 million on revenues of $156.7 million last year.TECO Coal increased its revenues by 25 percent, primarily due to increased demand in both the metallurgical and steam coal markets. TECO Coal also achieved lower unit production costs. TECO Coalbed Methane's results were near 1997 levels, as the volume decreases which are typical of coal seam gas wells were largely offset by lower operating expenses.
Although TECO Transport realized significant growth in its river operations, reflecting the barges added earlier in the year and increased northbound activity, operating income was down slightly. Weather delays from an active storm season, along with a continued weak export market, negatively impacted the Gulf and terminal operations and more than offset the increases in the river business.
Tampa Electric reported third quarter operating income of $94.6 million, compared to $94.0 million last year. Revenues for the quarter totaled $353.7 million, including recognition of $11.8 million in previously deferred revenues, up from $342.3 million last year, which included $10.6 million of deferred revenues. Energy sales for the quarter reflected continued strong customer growth as well as warmer than normal weather, with retail energy sales up 7.4 percent over last year. This increase was partially offset by higher operating expenses.
Operating income at Peoples Gas System was $3.2 million, down $1.4 million from last year. This decline was due to severance charges in the quarter associated with the decision earlier this year to discontinue the appliance sales and service operation. Base revenues were up over eight percent compared to last year, driven by strong customer growth.
Year-to-date operating income from the company's diversified businesses, excluding the one-time gain and charges at TECO Coal and TeCom recorded in the first quarter, was $85.3 million, up from $83.1 million last year. Revenues for the current year were $504.8 million, compared to $462.0 million last year. The 1998 results reflect strong contributions from TECO Coal and the Peoples Gas propane business. TECO Transport had significant growth in the river business from the barge additions earlier this year and increased northbound volumes. However, the effects of unfavorable weather conditions and a weak export market offset this growth. TECO Coalbed Methane reported lower operating income due to expected lower production.
Tampa Electric reported year-to-date operating income of $231.0 million, compared to 1997 operating income of $224.4 million. The 1998 results exclude a one-time charge of $9.6 million pretax, recorded in the first quarter. Revenues for the year were $948.0 million including $31.7 million in revenues previously deferred, compared to $915.1 million last year including deferred revenues of $27.7 million. Base revenues were up $10.7 million over last year, reflecting customer growth of 2.3 percent and retail energy sales growth of 4.5 percent. Higher operating expenses partially offset the revenue growth.
Peoples Gas System reported operating income of $23.3 million, compared to $25.6 million last year. Base revenues continued to grow, with residential volumes up 17.1 percent and commercial volumes up 8.4 percent. Higher expenses primarily related to severance costs associated with discontinuing the appliance sales and service operation more than offset the strong sales.
Current year net income of $181.7 million includes first quarter one-time after-tax charges totaling $16.8 million and a net gain from discontinued operations of $22.2 million reflecting the sale of offshore oil and gas assets. The first quarter one-time charges include a charge at Tampa Electric related to the separation of certain wholesale power contracts, asset value adjustments at TECO Coal, and the write-off at TeCom of product development costs associated with InterLane® residential system features developed early in the product life and no longer incorporated in the current system's design. Year-to-date net income in 1997 of $160.6 million included after-tax merger costs of $3.4 million and after-tax charges from discontinued operations of $8.2 million.
TECO Energy is a diversified energy-related holding company headquartered in Tampa. Its principal businesses are Tampa Electric, Peoples Gas System, TECO Transport, TECO Coal, TECO Coalbed Methane, TECO Power Services, Peoples Gas Company, Bosek, Gibson and Associates and TeCom.
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.