Teco Energy's 3Q Net Down 21% On Tax Provision Increase

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; [e-mail]