By Bradley Olson
Bloomberg News
TransCanada Corp., the company whose $7.6 billion Keystone XL pipeline was rejected by the U.S. last month, said profit rose 39 percent as it began shipping oil.
Fourth-quarter net income increased to C$375 million ($375 million), or 53 cents a share, from C$269 million, or 39 cents, a year earlier, Calgary-based TransCanada said in a statement today. Excluding losses from financial contracts, per-share profit was 3 cents less than the average of 12 analysts’ estimates compiled by Bloomberg.
“The earnings increase is coming from new pipelines,” Steven Paget, a Calgary-based analyst at FirstEnergy Capital Corp. who rates TransCanada “underperform” and doesn’t own the shares, said in an interview before the earnings were released.
Sales rose 15 percent to C$2.36 billion. The company said it plans to complete C$12 billion in new projects that will start operating by early 2015. They include the Keystone XL pipeline expansion as well as completing a wind farm in Quebec, solar projects in Ontario and restarting units at the Bruce Power nuclear plant in Ontario.
TransCanada, which owns 57,000 kilometers (35,000 miles) of pipelines, began shipping crude for the first time last year through its existing Keystone pipeline. The system is capable of carrying 591,000 barrels of crude a day from oil-sands projects in Alberta to Illinois and Oklahoma.
‘Fully Committed’
The Keystone XL project, which would expand the amount of oil that can be shipped from Canada and extend the system to Texas refineries, was rejected by the Obama administration because of concerns about the pipeline’s path through portions of Nebraska.
The company “remains fully committed to the construction of Keystone XL,” according to today’s statement. “TransCanada will reapply for a presidential permit and expects a new application would be processed in an expedited manner to allow for an in-service date of early 2015.”
TransCanada rose 0.7 percent to C$41.76 at 9:30 a.m. in Toronto. The shares have nine buy, four hold and three sell recommendations from analysts.
