TransCanada Quarterly Profit Rises on Power and Pipe Volumes

TransCanada Corp., which divides its business between pipelines and power plants, reported higher second-quarter profit as the company transported more fuel and produced more electricity from a nuclear plant in Ontario.

Net income increased to C$429 million ($329 million), or 60 cents a share, from C$416 million, or 59 cents a share, in the same period last year, the Calgary-based company said Friday in a statement. Excluding costs of cutting jobs and an adjustment to taxes with new higher corporate rates in Alberta, per-share earnings were 4 cents more than the 52-cent average of 11 analysts’ estimates compiled by Bloomberg.

“We believe the company putting up good numbers in a weak commodity price environment will be well-received,” Robert Kwan, an analyst at RBC Dominion Securities Inc. in Vancouver, wrote in a research note Friday. Higher-than-expected results were partly due to the positive impact of a Canadian regulatory ruling on gas pipeline tolls, Kwan said.

The company that’s seeking to build the Keystone XL oil pipeline derived 37 percent of its revenue from its power unit last year. TransCanada plans to build C$34 billion of large-scale oil and natural gas conduits as it seeks higher growth from its pipeline businesses.

Some of the developments, including the Keystone XL project to bring Canadian crude to Gulf Coast refineries, face delays as environmental concerns about the oil sands and pipelines slow regulatory reviews. The C$12 billion price of the Energy East oil pipeline proposal to Canada’s Atlantic Coast is expected to rise on delays and changes to the project, the company said.

TransCanada benefited in the second quarter from fewer days offline at its Bruce Power nuclear power plant in Ontario and higher uncontracted volumes of crude transported through its Keystone pipeline system from Canada to the U.S.

The company reported the results before the start of regular trading on North American markets. The stock, which has eight buy, six hold and three sell recommendations from analysts, rose about 1 percent to close at C$50.83 Friday in Toronto.

Before it's here, it's on the Bloomberg Terminal.