A solid performance in TECO Energy's core and expanding businesses helped the Tampa utility push its net income up 25 percent in the second quarter.
The company reported earnings Thursday of $71.9-million for the quarter ended June 30, up from $57.5-million in the second quarter of 2000. Per-share earnings of 53 cents were up 15 percent from the year-ago figure of 46 cents and beat the 51-cent estimate in a survey of analysts by Thomson Financial/First Call.
The financial boost was distributed throughout the TECO family. Tampa Electric and People's Gas both garnered new customers, thanks to Florida's continuing population growth. TECO's coal unit posted an increase in both conventional coal and synthetic fuel sales. And the company's independent power arm, TECO Power Services, continued its expansion.
The sole downturn came in the utility's shipping business.
TECO Transport reported earnings of $6.2-million, down from $6.5-million a year ago. But in a sluggish economy, the dip in transport income was largely expected and barely dented an overall positive performance.
"Our 22 percent higher earnings per share for the first six months shows that we are putting the pieces in place to deliver the long-term earnings growth that we have targeted," TECO chief Bob Fagan said in a statement.
The largest of TECO's business units, Tampa Electric, had net income of $38.1-million, up from $35.7-million a year ago. A growing customer base more than offset the effect of mild spring weather on keeping energy sales down.
"While the national economy is in a slowdown, Florida is holding up fairly well," TECO spokeswoman Laura Plumb said. "We have (Tampa Electric) customer growth in this area of nearly 3 percent."
People's Gas likewise saw net income inch up to $4.2-million from $4-million, thanks to a 4 percent increase in customers.
TECO Coal achieved the sharpest uptick with net income more than doubling to $13.7-million from $6.3-million last year. Results were propelled by a full quarter of production from the company's synthetic fuel facilities, which began operating during the second quarter of 2000.
Investors were perhaps most keen to how quickly and profitably TECO is remaking itself into an independent power company. TECO's Power Services unit has been aggressively building non-regulated power plants to sell electricity outside its home territory.
"TECO Power Services is the business to really watch," said Timothy Winter, an analyst who follows TECO for A.G. Edwards & Sons Inc. in St. Louis. "That's going to partially drive the stock."
Investors weren't let down.
Power Services' net income rose to $6.8-million from $5.3-million, boosted by higher earnings from a Guatemalan operation and a bigger return on investments in Texas and Virginia.
Fagan predicted increased earnings from Power Services, more customer growth and higher coal prices would boost second-half results. His forecast calls for 2001 net income up 15 percent from last year's $1.99 per share.
Shares in TECO closed at $30.06, down 24 cents.
_ Jeff Harrington can be reached at harringtonsptimes.com or (813) 226-3407.