TECO Energy reports first quarter earnings of $.37 per share
TAMPA, April 15, 1999
TECO Energy, Inc. (NYSE/TE) today reported first quarter 1999 earnings from continuing operations of $.37 per share compared with last year’s first quarter of $.23 per share, or $.36 per share excluding one-time charges.
Net income for the first quarter was $48.6 million, excluding gains from discontinued operations of $.6 million. Net income for the same period last year, excluding a $22.2 million after-tax gain from discontinued operations and one-time after-tax charges of $16.8 million, was $47.6 million. Net income including one-time charges and discontinued operations was $49.2 million for the quarter compared with $53.0 million for the same period last year.
Chief Executive Officer Girard F. Anderson said, "Our first quarter results reflected a return to good growth on the diversified side of our company along with solid performances in our regulated operations despite an unusually warm winter."
He added, "TECO Transport and TECO Power Services, both important components of our future growth, delivered improved results this quarter. Operating income at Transport grew 22 percent quarter over quarter. TECO Power Services delivered higher results from its growth initiatives in Central America, and TECO Coal continued to do an excellent job improving unit production costs."
At Tampa Electric, first quarter operating income was $55.2 million compared with $56.2 million for the same period last year, excluding a one-time pretax charge of $9.6 million last year from mitigation of the effects of a Florida Public Service Commission ruling that separated certain wholesale power sales contracts from retail revenues through 1999. Tampa Electric’s revenues were $260.9 million for the quarter compared with $273.4 million for the same period last year. Revenues in 1998’s first quarter included recognition of $8.7 million of previously deferred revenues associated with the company’s current rate agreement, partially offset by a stipulated temporary base rate reduction of $4.4 million for the quarter. In accordance with the agreement, the temporary base rate reduction and recognition of previously deferred revenues ended in December 1998. Despite warmer weather than last year, revenues for the current quarter reflected an increase in retail sales of 2.3 percent, driven by customer growth of 2.5 percent. Interchange sales were lower because of mild winter weather and lower gas prices. Slightly lower operations and maintenance expenses contributed to quarterly results.
Peoples Gas System reported operating income of $14.7 million for the quarter compared with $15.4 million last year. Revenues for the quarter were $71.1 million compared with $80.7 million for the same period last year. Residential and commercial therm sales were almost 7 percent below last year because of the warm winter weather. Customer growth was 2.9 percent, reflecting Peoples’ initiatives to expand its market. Lower operations and maintenance expenses, partially offset by higher depreciation, reflected cost savings from restructuring and exiting the appliance sales and service business last year.
TECO Transport reported revenues of $57.6 million and operating income of $11.2 million in the first quarter, compared with revenues of $54.5 million and operating income of $9.2 million last year. Results for the current quarter reflected a substantial increase in third party business, partially offset by lower coal volumes moved for Tampa Electric. The increase in third party revenues was the result of strong grain volumes in the ocean-going business, along with increases in river volumes from the barges added in 1998. The export coal market continued to be weak in the first quarter.
TECO Power Services recorded revenues of $23.8 million for the quarter, compared with $18.9 million last year for the same period. Operating income was $4.8 million, an increase of $1.3 million over last year. These improvements reflected contributions from the company’s Guatemalan distribution business which was acquired in September 1998, higher earnings from the company’s Alborada Power Station in Guatemala and capitalization of interest during construction on its equity investment in the San Jose Power Station.
At TECO Coal, revenues for the quarter were $53.1 million compared with $56.7 million last year. Operating income was $5.2 million for first quarter 1999, compared with $4.4 million, excluding a one-time pretax charge of $13.6 million, for the same period last year. Operating income for the quarter reflected continued improvements in unit production costs, partially offset by lower revenues from planned reductions in Tampa Electric volumes.
TECO Energy’s other diversified companies recorded $23.8 million in revenues and operating income of $6.0 million, including non-conventional fuels tax credits, for the first quarter. This compares with revenues of $29.4 million and operating income of $9.1 million for the same period last year, which excludes a one-time pretax charge of $2.7 million at TeCom. TECO Coalbed Methane results were lower for the quarter, reflecting a 7 percent decline in production and 14 percent lower gas prices, after the favorable effects of hedging. Peoples Gas Company, the propane business, was even with last year, reflecting lower propane volumes and revenues because of warmer weather, offset by lower expenses. Operating income at TeCom was lower, reflecting the amortization of capitalized development costs which began in the fourth quarter 1998.
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.