Teco Energy Inc.'s (TE) third-quarter profit fell 21% on an
increased income-tax provision as revenue and margins improved.
President and Chief Executive John Ramil said, "Our results this
quarter reflect stronger than expected customer growth for the
Florida utilities, driven by the improvements in the state and
local economies that we experienced in the first half of the
year."
The utility company has seen results improve of late as its main
business, utility Tampa Electric, has benefited from higher rates
and increased demand. Earnings at the company's coal business have
also rebounded sharply with higher selling prices.
Fitch Ratings last week put Teco on watch for a possible upgrade
following the sale of its stake in a Guatemalan electrical utility,
saying the deal resulted in cash generation for the company and is
likely to speed up its debt-reduction efforts.
Teco reported a profit of $51 million, or 24 cents a share, down
from $64.8 million, or 30 cents a share, a year earlier. Excluding
restructuring and project-development costs, earnings fell to $74.1
million from $85.6 million. Revenue edged up 0.6% to $901.8
million.
Analysts polled by Thomson Reuters estimated earnings of 41
cents a share and $951 million in revenue.
Operating margin widened to 17.7% from 15.1%. But income-tax
provision more than doubled to $65.5 million.
Earnings in the Tampa Electric segment rose 14% as volume
increased 3.6%. The coal business saw income decrease 28% as tons
sold fell 4%.
Shares of Teco, which raised the bottom end of its 2010 earnings
estimate, closed at $17.56 Wednesday and were inactive premarket.
The stock has risen 28% the past year.
-By Jodi Xu, Dow Jones Newswires; 212-416-3037;
jodi.xu@dowjones.com