Correction: Corrects the figures to read as Canadian Dollars, rest remains unchanged. The corrected version follows.
Thursday, energy infrastructure provider TransCanada Corp. (TRP, TRP.TO,) reported a decline in second quarter earnings from last year, impacted primarily by higher expenses. Revenues and adjusted earnings for the quarter, however, improved from last year.
The Calgary, Canada-based company posted second quarter net income of C$314 million or C$0.50 per share, compared to C$324 million or C$0.58 per share for the year ago period.
Comparable earnings rose to C$319 million in second quarter 2009 from C$316 million a year ago, boosted by higher earnings from Bruce Power, Eastern Power, Natural Gas Storage, and U.S. Pipelines. Comparable earnings on a per share basis, declined to C$0.51 from C$0.57 a year ago, on a higher share count for the current quarter.
On average, three analysts polled by Thomson Reuters expected the company to earn $0.39 per share for the quarter. Analysts' estimates typically exclude special items.
The company indicated that comparable earnings in second quarter 2009 and 2008 excluded C$5 million of after tax unrealized losses, and C$8 million of after tax unrealized gains, respectively, resulting from changes in the fair value of proprietary natural gas inventory and natural gas forward purchase and sale contracts.
Hal Kvisle, TransCanada's president and chief executive officer, said, "Our solid second quarter performance in the face of historically low power prices in Alberta and Ontario demonstrates the inherent strength of our business model and the quality of our existing assets."
Quarterly revenues increased to C$2.127 billion from C$2.017 billion in the same period last year.
Funds generated from operations in second quarter were C$692 million, compared to C$676 million in second quarter 2008.
Pipelines business generated comparable earnings before interest and tax or EBIT of C$489 million for the quarter, compared to C$457 million a year ago.
Canadian Mainline's net income for quarter decreased C$3 million primarily as a result of a lower average investment base and a lower rate of return on common equity as determined by the National Energy Board, of 8.57% in 2009 compared to 8.71% in 2008, partially offset by higher operations, maintenance and administrative cost savings.
The Alberta System's net income was C$40 million in second quarter 2009, up from C$33 million in the prior-year period.
U.S. Pipelines - ANR's earnings before interest, tax, depreciation and amortization or EBITDA, in the quarter was C$73 million, compared to C$72 million a year ago, while GTN's EBITDA was C$49 million up C$3 million from the same periods in 2008.
Energy's comparable earnings before interest and tax or EBIT was C$214 million in the second quarter 2009, compared to C$202 million in second quarter 2008.
Western Power's EBITDA of C$59 million in the quarter decreased C$79 million, compared to C$138 million in second quarter 2008. The decrease was primarily due to lower earnings from the Alberta power portfolio resulting from lower overall realized power prices.
Eastern Power's EBITDA of C$60 million for the quarter increased by C$26 million, compared to the year ago quarter.
TransCanada's proportionate share of Bruce Power's comparable EBITDA increased C$53 million to C$102 million in second quarter 2009, compared to second quarter 2008. U.S. Power's EBITDA was C$65 million, an increase of C$15 million from the same period in 2008.
Natural Gas Storage's comparable EBITDA for the quarter was C$34 million, compared to C$6 million a year ago.
Quarterly operating expenses increased to C$1.117 billion from C$1.057 billion a year ago. Interest expenses rose to C$259 million from C$178 million in the previous year.
Net income for the first six months was C$648 million or C$1.04 per share, down from C$773 million or C$1.40 per share in the comparable period last year. Comparable earnings rose to C$662 million from C$642 million, while on a per share basis, comparable earnings declined to C$1.06 from C$1.17 a year ago.
For the first half, TransCanada generated revenues of C$4.507 billion, up from C$4.150 billion in the corresponding period last year.
Kvisle added that the company is well positioned to fund its large capital program, and TransCanada expects significant growth in earnings and cash flow over the next four years as C$21 billion of secured, low-risk projects are placed into service.
TRP closed Thursday's trading on NYSE at $28.26, up $0.38 or 1.36%, on a volume of about 318 thousand shares.
On the TSX, the stock closed at C$30.60, up C$0.22 or 0.72%, on a volume of about 2.56 million shares.
For comments and feedback: editorial@rttnews.com