Energy infrastructure company TransCanada Corp. (TRP.TO,TRP) reported Friday a profit for the second quarter that declined from last year, saddled by historically low natural gas prices.
With charges and higher plant operating costs also weighing on results, earnings per share and quarterly revenues came in below analysts' expectations.
"TransCanada's diverse, high-quality energy infrastructure assets performed well in the second quarter. While historically high natural gas storage levels and low natural gas and power prices adversely affected certain aspects of our business, the majority of our assets continued to generate stable and predictable earnings and cash flow," President and CEO Russ Girling said in a statement.
The company noted that incremental earnings from Keystone and other recently commissioned assets were more than offset by lower contributions from U.S. Power and certain natural gas pipelines including the Canadian Mainline, ANR and Great Lakes.
The Calgary, Canada-based company reported net income of C$272 million or C$0.39 per share for the second quarter, lower than C$353 million or C$0.50 per share in the prior-year quarter.
Results for the latest quarter includes an after-tax charge of $37 million related to the Sundance A power purchase arrangement arbitration decision received in July 2012. Excluding the item, adjusted net income declined to $309 million or $0.44 per share from $353 million or $0.50 per share in the year-ago quarter.
Comparable earnings for the quarter were C$300 million or C$0.43 per share, lower than C$355 million or C$0.51 per share in the prior year.
Excluding an after-tax charge of $22 million, comparable earnings for quarter was down to $322 million or $0.46 per share from $355 million or $0.51 per share last year.
On average, 10 analysts polled by Thomson Reuters expected earnings of C$0.48 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenues for the quarter edged up to C$1.81 billion from C$1.80 billion in the same quarter last year, while analysts estimated C$2.11 billion.
TransCanada's board also declared a quarterly dividend of C$0.44 per share for the quarter ending September 30, payable on October 31 to shareholders of record at the close of business on September 28, 2012.
TransCanada noted that it was selected to develop a proposed $4 billion pipeline as part of the Coastal GasLink Project that would transport natural gas to the recently announced LNG Canada liquefied natural gas export facility near Kitimat in British Columbia to move Canadian natural gas to Asian markets.
In Friday's regular trading session, TRP is currently trading at $44.25, down $0.06 or 0.14% on a volume of 54,179 shares. On the Toronto Stock Exchange, TRP.TO is currently trading at C$44.52, down C$0.28 or 0.62% on a volume of 0.27 million shares.
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