TransCanada Q3 Profit Tops View, But Revenues Miss

(RTTNews) - Energy infrastructure company TransCanada Corp. (TRP.TO, TRP) reported Tuesday a profit for the third quarter that decreased from last year, despite solid results from its three core businesses, hurt by higher income tax expense. Comparable earnings per share topped analysts' expectations, while quarterly revenues missed their estimates.

"Our three core businesses generated solid earnings and cash flow during the quarter. Contributions from new assets like the Keystone Gulf Coast Extension and the Tamazunchale Extension in Mexico, along with strong results from Bruce Power, highlight the benefits of a diversified and growing portfolio of pipeline and power assets," President and CEO Russ Girling said in a statement.

The Calgary, Canada-based company reported net income of C$457 million or C$0.64 per share for the third quarter, lower than C$481 million or C$0.68 per share in the prior-year quarter.

Comparable earnings for the quarter was C$450 million or C$0.63 per share, compared to C$447 million or C$0.63 per share in the year-ago quarter.

The company noted that higher earnings from Keystone, Mexican Pipelines and U.S. Power were more than offset by lower contributions from Western Power, U.S. Pipelines and Gas Storage.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of C$0.61 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter grew to C$2.45 billion from C$2.20 billion in the same quarter last year, but missed three Wall Street analysts' consensus estimate of C$2.59 billion.

Natural gas pipeline revenues for the quarter grew to C$1.15 billion from last year's C$1.08 billion, and liquids pipelines revenue increased to C$387 million from C$281 million in the year-ago quarter. Energy revenues increased to C$919 million from C$840 million last year.

Income from equity investments declined to C$159 million from C$177 million in the prior-year quarter. Total operating and other expenses were C$1.57 billion, up from C$1.45 billion a year ago. Income tax expense for the quarter was $239 million, up from $190 million last year.

Funds generated from operations for quarter totaled C$1.07 billion, up from C$1.05 billion in the prior-year quarter.

TransCanada's board also declared a quarterly dividend of C$0.48 per share for the fourth quarter, payable on January 30, 2015, to shareholders of record at the close of December 31, 2014.

Looking forward, the company noted that its current asset base and financial strength positions it well to generate significant long-term shareholder value through execution of its industry-leading capital program and its commitment to continuously evaluate its approach to capital allocation.

The company also announces $4.7 billion of new capital projects, including $2.7 billion for expansion on the NGTL system, and $2 billion of expansions and facility modifications to the Canadian Mainline in Ontario.

"We are also pleased to have announced an additional $4.7 billion of new capital projects highlighting the organic growth opportunities that are tied to our unparalleled asset footprint," Girling added.

In Tuesday's regular trading session, TRP is currently trading at $48.48, down $0.05 or 0.10% on a volume of 0.10 million shares, while TRP.TO is trading on the TSX at C$55.03, down C$0.52 or 0.94% on a volume of 0.10 million shares.