TransCanada Profit Hurt by Alberta’s Falling Power Rates
TransCanada Corp. (TRP), the energy company proposing the $5.4 billion Keystone XL pipeline, said comparable profit declined to the lowest in six quarters as it sold less power and electricity prices declined.
Net income excluding one-time items fell to C$332 million ($304 million), or 47 cents a share, in the second quarter from C$357 million, or 51 cents, a year earlier, the Calgary-based company said in a statement today. That missed the 48-cent average of 10 analysts’ estimates compiled by Bloomberg. Profit including a C$99 million gain from the sale of the Cancarb power plant in Alberta rose 14 percent to C$416 million.
TransCanada is seeking more oil transportation business with projects including Keystone XL, which would carry Alberta’s oil-sands crude to U.S Gulf Coast refineries. The company’s natural gas pipeline unit delivered 51 percent of sales last year, followed by the power business at 36 percent and oil pipelines division at 13 percent.
“Weak Alberta power prices and maintenance outages at Bruce Power weighed on second-quarter results,” Russ Girling, TransCanada’s chief executive officer, said in the statement. “Both businesses are expected to produce stronger results in the future due to positive Alberta power market fundamentals.”
Power prices in Alberta were 65 percent lower in the second quarter than a year earlier, according to Alberta Electric System Operator data compiled by Bloomberg. Bruce Power, the Ontario nuclear complex in which TransCanada owns a stake, also faced unplanned outages in the quarter.
TransCanada is awaiting a ruling from President Barack Obama on Keystone XL after he first rejected the pipeline in January 2012 over environmental concerns with the route in Nebraska, and allowed TransCanada to later re-apply with an altered proposal. It was further delayed in April when the U.S. extended its review.
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