TORONTO: TransCanada Corp., which divides its business between pipelines and power plants, reported higher second-quarter profit as electricity prices in Alberta rose and the company transported more fuel.
Net income increased to $429 million, or 60 cents a share, from $416 million, or 59 cents a share, in the same period last year, the Calgary-based energy company said in a statement. Excluding one-time items, per-share earnings were 4 cents more than the 52-cents average of 11 analysts’ estimates.
The company that’s seeking to build the Keystone XL oil pipeline derived 37 per cent of its revenue from its power unit last year. Alberta spot electricity prices rose 35 per cent from a year earlier, on hotter weather and an unplanned outage of a coal power plant, to average $57.22 per megawatt-hour in the second quarter, according to data from the Alberta Electric System Operator compiled by Bloomberg.
TransCanada plans to build $34 billion of large-scale oil and natural gas conduits as it seeks higher growth from its pipeline businesses.
“Over the past several months, we advanced key components of our growth plans which included more than $13 billion in proposed natural gas pipeline projects,” the company said in the statement.
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 thesis continues to depend on the company’s ability to move large scale, commercially secured projects” to a final investment decision, Robert Catellier, an analyst at GMP Securities LP in Toronto, wrote in a July 24 note.
TransCanada reported 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 2.3 per cent to close at $50.37 in Toronto.
