Energy utility TECO Energy Inc. (TE) announced fourth-quarter 2014 operating earnings of 19 cents per share, which missed the Zacks Consensus Estimate of 21 cents by 9.5%. Earnings were a penny higher than last year.
TECO Energy’s operating earnings for 2014 were $1.03 per share compared with 91 cents per share reported in 2013. Earnings were in line with the Zacks Consensus Estimate.
Total Revenue
Total revenues in the fourth quarter were $695.2 million, up 23.6% from $562.2 million in the year-ago period. The upside followed its regulated business, which improved 23.8%, while its unregulated operations rose 8.3%.
Reported revenues surpassed the Zacks Consensus Estimate of $670 million by 3.8%.
Teco Energy’s total revenues for 2014 were $2,566.4 million compared with $2,355.1 million in the prior year, reflecting an increase of 8.9%. However, 2014 revenues fell short of the Zacks expectation of $2,767 million by 7.3%.
Operational Update
Total expenses during both the quarter and the full year increased year over year, on higher input costs. For the fourth quarter, expenses increased 24.9% to $583.4 million, while for the full year expenses increased 8.5% to $2,061 million.
The increase in expenses notwithstanding, higher revenues led to a 17.9% jump in the fourth-quarter operating income to $112 million.
Interest charges during the quarter decreased to $49.6 million from $40.9 million owing to lower long-term debt.
The ongoing improvement in the Florida economy has helped Tampa Electric to increase its average customer count by 1.6% in the fourth quarter, while People Gas increased its average customer base by 2.3%. This resulted in higher electric and natural gas sales volume.
Financial Update
Cash and cash equivalents of the company as of Dec 31, 2014, were $25.4 million compared with $185.5 million as of Dec 31, 2013.
Capital expenditure during the year was $714.3 million, up 34.2% from $532.4 million in 2013.
Long-term debts as of Dec 31, 2014, were $3.35 billion compared with $2.84 billion as of Dec 31, 2013.
Guidance
TECO Energy expects earnings per share for 2015 to range between $1.08 and $1.11. The forecast assumes normal weather in 2015.
Other Company Release
American Electric Power Co., Inc.’s (AEP) earnings per share of 48 cents in the fourth quarter 2014 lagged the Zacks Consensus Estimate of 52 cents by 7.7%.
CMS Energy Corp. (CMS) reported fourth-quarter earnings of 35 cents per share, missing the Zacks Consensus Estimate of 36 cents by 2.8%
Dominion Resources Inc. (D) reported fourth-quarter 2014 operating earnings of 84 cents per share, short of the Zacks Consensus Estimate by a penny or by 1.2%.
Our View
We believe a robust Florida economy and the New Mexico Gas Co. acquisition will boost the performance of the company going forward.
TECO Energy holds a Zacks Rank #3 (Hold).
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