TransCanada Quarterly Profit Rises on Increased Power Supplies

TransCanada Corp. (TRP), the company proposing to build the Keystone XL oil pipeline, said fourth-quarter profit rose 37 percent as it increased output from nuclear and coal power plants in Canada.

Net income climbed to C$420 million ($379 million), or 59 cents a share, from C$306 million, or 43 cents, a year earlier, the Calgary-based company said in a statement on Marketwired today. Excluding one-time items, per-share profit was 2 cents below the 60-cent average of 12 analysts’ estimates compiled by Bloomberg. The company boosted its dividend 2 cents to 48 cents.

TransCanada is selling more electricity after the restart of units at Sundance, Alberta’s largest coal power plant, and at Bruce Power, the world’s biggest operating nuclear plant in Ontario. The company got about 34 percent of 2012 sales from its energy business, the rest came from shipping natural gas and oil on 68,500 kilometers (42,500 miles) of pipelines.

Despite recent weakness, Alberta power prices are poised to be “relatively strong” because of an aging coal fleet and transmission bottlenecks, Rob Catellier, a former analyst at Macquarie Capital Markets Canada Ltd. in Toronto, wrote in a Jan. 29 note.

TransCanada continues to await a U.S. permit to build the $5.4 billion Keystone XL, a pipeline that would bring crude from Alberta oil-sands projects to U.S. Gulf Coast refineries. A judge ruled yesterday that Nebraska’s governor didn’t have authority to approve a revised route through the state, a decision that may push back the timeline for the project.

“We are disappointed and disagree with the decision of the Nebraska district court and will now analyze the judgment and decide what next steps may be taken,” the company said today. Nebraska’s attorney general has filed an appeal.

Government Report

In January, TransCanada started delivering oil on a lower portion of the pipeline. The company built the southern leg of the system as it awaits the presidential permit to complete a segment that runs across the U.S.-Canadian border.

The U.S. State Department released a Jan. 31 report finding the pipeline wouldn’t dramatically increase carbon dioxide emissions because the oil sands would be developed without it. The report started a 90-day review of whether the pipeline is in the U.S. national interest before a final ruling by President Barack Obama.

The company’s quarterly results were released before the start of regular trading on North American markets. TransCanada, which has 12 buy and five hold recommendations from analysts, rose 0.4 percent to C$49.90 at the close yesterday in Toronto. The shares have gained 2.8 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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