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TECO Reports 30% Drop In 2nd-Quarter Earnings

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By RUSSELL RAY | The Tampa Tribune

Published: July 31, 2008

TAMPA - TECO Energy Corp. reported a 30 percent drop in second-quarter earnings this morning, the result of last year's sale of the company's shipping business and the expiration of tax credits for the production of synthetic fuel.

The quarterly results didn't include gains from those businesses, which contributed $20.6 million, or 10 cents a share, to the second-quarter results of 2007.

The company also pointed to a $14.3 million tax gain in last year's second quarter related to the sale of two merchant power plants in 2005.

Net income for the quarter totaled $51.4 million, or 24 cents a share, down from $73.7 million, or 35 cents a share, in the second quarter of 2007.

During the first half of this year, TECO has earned $82.2 million, or 39 cents a share, down from $146.5 million, or 70 cents a share, during the same period last year.

The company also blamed the struggling housing market for lower-than-expected energy sales and customer growth in the second quarter at Tampa Electric and Peoples Gas.

At Tampa Electric, electricity sales increased 2.7 percent while customer growth averaged just 0.2 percent. Average customer growth at Peoples Gas was 0.3 percent.

"Various forecasts earlier in the year indicated that the housing market was expected to bottom out in 2008," TECO Chairman and CEO Sherrill Hudson said, "but the credit and housing issues appear to be deeper and more protracted than were forecast even a few months ago."

The company's stock price jumped more than 2 percent during morning trading to $19.22 a share.

Reporter Russell Ray can be reached at (813) 259-7870 or rray@tampatrib.com.

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