* Q1 EPS C$0.50 v. C$0.59 a year earlier
* Comparable EPS C$0.52 v. estimated C$0.54
* Revenue up 2 pct
* Shares down C$0.26 at C$42.87
April 27 (Reuters) – TransCanada Corp reported a 14
percent drop in quarterly profit on Friday as the natural
gas-transport segment of the country’s biggest pipeline company
was punished by North America’s depressed gas industry.
TransCanada, which decided recently to chop its Canada-Texas
Keystone XL oil pipeline into two pieces to get the
controversial project started, said net income fell to C$352
million ($357.7 million), or 50 Canadian cents a share, in the
first quarter from C$411 million, or 59 Canadian cents a share,
a year earlier.
Comparable earnings, which exclude most one-time items, fell
to C$363 million, or 52 Canadian cents a share, from C$423
million, or 61 Canadian cents a share.
That lagged an average estimate among analysts by 2 Canadian
cents a share, according to Thomson Reuters I/B/E/S.
The worse-than-expected result suffered from weakness in all
of the company’s natural gas-related segments, UBS analyst Chad
Friess said in a research note.
TransCanada shares were 26 Canadian cents lower at C$42.87
on the Toronto Stock Exchange on Friday morning. They had
climbed 7 percent in the past year.
Overall revenue rose 2 percent to C$1.91 billion.
TransCanada said the contribution of its Canadian gas
mainline to profits shrank in the quarter due to weaker
regulated returns.
The company has been struggling in recent years with falling
volumes on its gas transport system to Eastern Canada from
Alberta, which was the foundation of the company when it was
established in the 1950s.
In June, Canada’s National Energy Board will hold a hearing
on TransCanada’s application to change the system’s business
structure to reflect shifts in the gas industry that have
followed the development of vast shale gas supplies throughout
the continent. The hearing will also address tolling for this
year and next with gas prices hovering around 10-year lows.
TransCanada’s U.S. pipelines also generated lower earnings.
Offsetting weakness in natural gas transport was the first
phase of the Keystone oil pipeline, a portion of which had
higher fixed tolls
In February, after the U.S. government rejected the full
$7.6 billion Keystone XL project, saying it could not work
toward a tight timeline set by Congress, TransCanada said it
would build the portion between Cushing, Oklahoma, and Gulf
Coast refineries first.
The company expects the Gulf Coast project to be in service
in mid to late 2013.
TransCanada said it plans to reapply to the U.S. State
Department to build the cross-board portion in hopes of having
the full project running by late 2014 or early 2015.
