TransCanada Q2 Profit Meets View, But Revenues Miss

(RTTNews) - Energy infrastructure company TransCanada Corp. (TRP.TO, TRP) reported Friday a profit for the second quarter that increased from last year, reflecting higher income from equity investments and revenue growth amid strong results across all three operating segments. Comparable earnings per share matched analysts' expectations, while quarterly revenues missed their estimates.

"All three of our business segments generated strong results during the second quarter. Higher power prices in Alberta, an increase in capacity prices in New York, the return to an eight unit site at Bruce Power and a higher Canadian Mainline allowed return on equity all contributed to a significant increase in earnings when compared to the same period last year," President and CEO Russ Girling said in a statement.

The Calgary, Canada-based company reported net income of C$365 million or C$0.52 per share for the second quarter, higher than C$272 million or C$0.39 per share in the prior-year quarter.

Results for the latest quarter included C$25 million favorable income tax adjustment due to the enactment of Canadian Federal tax legislation relating to Part VI.I tax, in June 2013, while the prior year included an after-tax charge of C$37 million related to the Sundance A power purchase arrangement arbitration decision received in July 2012.

Comparable earnings for the quarter grew to C$357 million or C$0.51 per share from C$300 million or C$0.43 per share in the prior year.

The company noted that higher earnings from the Canadian Mainline, Western Power, Bruce Power and U.S. Power were partially offset by lower contributions from U.S. Natural Gas Pipelines.

On average, nine analysts polled by Thomson Reuters expected earnings of C$0.51 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter grew to C$2.01 billion from C$1.85 billion in the same quarter last year, while analysts estimated C$2.11 billion.

Natural gas pipeline revenues for the quarter remained flat with last year at C$1.03 billion, and oil pipelines revenue grew to C$278 million from C$251 million in the year-ago quarter. Energy revenues increased to C$700 million from C$562 million last year.

Income from equity investments surged to C$153 million from C$65 million in the prior-year quarter. Total operating and other expenses were C$1.39 billion, up from C$1.28 billion a year ago.

TransCanada's board also declared a quarterly dividend of C$0.46 per share for the quarter ending September 30, payable on October 31 to shareholders of record at the close of business on September 30, 2013.

In Friday's regular trading session, TRP is currently trading at $45.52, up $0.40 or 0.89% on a volume of 0.31 million shares. On the Toronto Stock Exchange, TRP.TO is currently trading at C$46.76, up C$0.39 or 0.82% on a volume of 0.19 million shares.