TECO Energy enjoys solid earnings
By STEVE HUETTEL
© St. Petersburg Times,
TAMPA -- The parent of Tampa Electric Co. reported Thursday that net earnings grew 19 percent for the three months ended Sept. 30, thanks largely to its wholesale power projects outside Florida.
TECO Energy posted a third-quarter profit of $97.3-million, or 72 cents a share, compared with $82-million, or 65 cents a share, in the same quarter a year earlier. The company, which reported revenues of $679-million, up from $615-million, was relatively unscathed by the weakening economy. It remains on target to meet a goal of 15 percent earnings growth for the year, said chief financial officer Gordon Gillette.
But the economic slowdown could make it difficult next year for TECO to meet a long-term goal of growing earnings 10 percent, he said.
Retail sales at Tampa Electric, which produces nearly 60 percent of TECO Energy's profits, grew about 3 percent for the quarter over a year ago. Increased demand from residential and commercial customers offset declining sales to the phosphate industry.
But most of the earnings growth came from TECO Power Services, the company's wholesale power business. Power Services posted profits of $15.5-million, more than four times its earnings for the same quarter last year.
After becoming TECO Energy's chief executive in 1999, Robert Fagan pledged to make the unregulated world of selling wholesale power the biggest part of his company's business. He launched a buying binge of projects outside of Florida. Now, the strategy is paying off.
The gains in wholesale power came from operations of the Frontera Power Station in Texas acquired this year, an expansion of its Commonwealth Chesapeake plant in Virginia and interest from an investment in two Texas plants owned by Panda Energy, Gillette said. Power Services also benefitted from higher sales at two Guatemalan plants.
Two other TECO Energy subsidiaries had profit declines for the quarter.
TECO Transportation's earnings were off 16 percent to $8.2-million because of decreased barge shipments of government grain and steel-related products by customers, the company said. TECO Coal earnings of $12.9-million were 12 percent less than the third quarter of 2000 due to higher production costs.
-- Steve Huettel can be reached at email@example.com or (813) 226-3384.
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