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Earnings surge for energy company
By LOUIS HAU, Times Staff Writer
Boring seems to be the key to success lately in the electric power industry. Progress Energy Inc.'s first-quarter net income surged 57 percent, thanks to reliance on the basic business of selling electricity in the regulated retail market. It's the opposite of the drama unfolding at beleaguered TECO Energy Inc., which hitched its fortunes to riskier ventures outside its home turf. Progress Energy said Wednesday its net income jumped during the quarter ended March 31 to $208.2-million, or 89 cents a share, from $132.5-million, or 62 cents a share, from the same period last year. Total revenue at the Raleigh, N.C., company climbed to $2.02-billion from $1.79-billion. "We have turned the corner into 2003 in very good shape and we are very well-positioned to meet our financial commitments for this year," Progress chief financial officer Peter Scott told Wall Street analysts during a conference call. Prolonged winter weather and continued customer growth in the first quarter gave a sizable boost to Progress' regulated electric operations, Progress Energy Florida and Progress Energy Carolinas. Both also benefited from their portion of a $9.1-million tax benefit allocated by the parent company per a Securities and Exchange Commission order last year. Progress Energy Florida, formerly Florida Power Corp., recorded first-quarter net income of $70.8-million, up 23 percent from $57.7-million a year earlier. Progress Energy Carolinas, formerly Carolina Power & Light, had earnings soar 57 percent to $134.6-million, from $85.5-million a year earlier. The year-on-year growth in Progress Energy Florida's net income was magnified by the one-time $35-million refund given to customers in May as part of the company's rate-reduction settlement. The refund was booked as a one-time, after-tax charge of $21-million in the first quarter of 2002. As part of the same settlement, Progress Energy Florida distributed a $5-million refund to customers in March, but that refund didn't affect the first-quarter results because it was recorded as a charge in the preceding December quarter. The Florida Public Service Commission is expected to rule on a dispute between the utility and the Office of Public Counsel, which argues that the March refund should have been $23.2-million. Progress Ventures, which includes the company's unregulated wholesale power operations, posted first-quarter net income of $35.1-million, down from $39.5-million. Although Progress' relatively limited exposure to wholesale power markets has largely spared it the severe financial problems plaguing TECO, it still faces challenges of its own. Moody's Investors Service cut Progress' long-term debt rating by one notch in February, citing the company's slower-than-expected pace in reducing debt following the November 2000 merger of Carolina Power & Light and Florida Power's former parent Florida Progress Corp. Mindful of these concerns, Progress had already sold nearly 14.7-million shares of common stock in November, the proceeds of which were used to pay off debt. Progress is also selling off non-core assets. Progress is planning to sell up to $100-million in stock this year in small increments to continue improving the company's debt-to-equity ratio, Progress spokesman Keith Poston said. The company may also issue an additional $200-million in equity if opportunities arise to purchase power-supply contracts for its wholesale power plants, such as a power pact it has agreed to purchase from Williams Companies Inc. for $188-million to supply power to an electric cooperative in Georgia, Poston said. Progress said Wednesday that it entered into a new $200-million, 364-day credit agreement and a new $200-million, three-year credit agreement to replace earlier credit facilities. The company also said it reduced the size of Progress Energy Carolinas' 364-day facility from $285-million to $165-million. Progress' shares closed Wednesday at $40.76, up $1.27, on twice the average trading volume. -- Louis Hau can be reached at hau@sptimes.com
or (813) 226-3404.
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From the Times Business report
From the AP
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