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TransAlta Profit Misses Estimates After Force Majeure

TransAlta Corp. (TA), Canada’s largest publicly traded power generator, reported second-quarter profit that missed analysts’ estimates as a force majeure at a plant reduced its generating capacity.

Excluding one-time items, the company earned 3 cents a share, less than the 18-cent average of eight analysts’ estimates compiled by Bloomberg. Net income was C$15 million ($15 million), or 6 cents a share, compared with a loss of C$798 million, or C$3.52, a year earlier, the Calgary-based company said in a statement today.

The company’s generating availability in the second quarter fell to 82 percent from 87 percent a year earlier after a winding failure was discovered at its Keephills Unit 1 coal power plant. TransAlta claimed force majeure relief, which allows it to suspend contractual obligations in the event of extraordinary circumstances without paying penalties.

The company now expects full-year adjusted availability to be 87 to 89 percent instead of its intial target range of 89 to 90 percent, TransAlta said in the statement.

The shares fell 3.9 percent to C$14.30 at 11:38 a.m. in Toronto, the biggest intraday decline since June 20. The stock has one hold and six sell recommendations from analysts.

TransAlta on June 26 said it plans an initial public offering of some renewable-energy assets. TransAlta Renewables will have about 1,112 net megawatts of wind and hydropower plants. The company, which will retain an 80 percent to 85 percent stake in the renewables unit, expects to raise C$200 million to C$250 million when the share sale closes in August.

To contact the reporter on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net

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

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