TransCanada Profit Falls on Lower Natural Gas Shipments

TransCanada Corp., the transporter of 20 percent of North America’s natural gas, said fourth- quarter profit fell 19 percent as shipments of the fuel on some of its pipelines declined.

Net income dropped to C$306 million ($304 million), or 43 cents a share, from C$376 million, or 53 cents, a year earlier, the Calgary-based company said in a statement on Marketwire today. Excluding one-time items, per-share profit was 4 cents less than the 49-cent average of 12 analysts’ estimates compiled by Bloomberg.

TransCanada is moving less gas on its pipelines because a glut in North American supplies has reduced prices, resulting in more of the fuel being kept in storage. U.S. imports of Canadian gas fell 7 percent to 5.7 billion cubic feet a day during the first nine months of 2012 from the same period a year earlier, according to the Energy Information Administration.

“Fourth-quarter results will continue to be challenged by low contribution from the U.S.-based natural gas pipeline business as well as by the impact of low U.S. northeast power prices,” Juan Plessis, an analyst at Canaccord Genuity in Vancouver, wrote in a Jan. 28 note to clients. Two nuclear power reactors that returned to service during the quarter operated at less than full capacity, he wrote.

TransCanada expected “softer” earnings in 2012 due partly to gas, reduced power prices and a warmer-than-average winter, Chief Executive Officer Russ Girling said at a Jan. 24 investor conference.

The company, which proposed the Keystone XL oil pipeline to bring crude from the oil sands to the Gulf Coast, sees a U.S. ruling on the $5.3 billion northern leg of the system in “a few weeks to a couple of months,” Girling said in a Feb. 6 interview.

TransCanada released results before the start of regular trading on North American markets. The company declined 1 percent to C$48.25 yesterday in Toronto. The shares, which have eight buy, eight hold and one sell recommendation from analysts, have risen 2.6 percent this year.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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