April 28, 2009 / 2:29 PM / in 9 years

UPDATE 2-TransAlta maintenance, prices hamper Q1 profit

* Q1 comparable EPS C$0.18 vs est C$0.21

* Lower production hurts profit

* Q1 rev down 6 pct to C$756 mln

* Shares rise 1.2 pct (Adds detail, updates shares.)

CALGARY, Alberta, April 28 (Reuters) - First-quarter profit at TransAlta Corp (TA.TO), Canada’s largest listed electricity producer, was hampered by downtime at its power plants and falling prices, though net income rose from a year-prior quarter that included a big charge.

TransAlta said net income rose 27 percent to C$42 million ($34.4 million), or 21 Canadian cents per share, from C$33 million, or 17 Canadian cents, in the fourth-quarter of last year, when a C$65 million charge cut into the bottom line.

Comparable earnings, which exclude most one-time items. fell 64 percent to C$36 million, or 18 Canadian cents, from C$99 million, or 50 Canadian cents, missing the average profit forecast of 21 cents among analyst forecasts compiled by Reuters Estimates.

Plunging natural gas prices and demand cuts spurred by the recession have cut electricity prices in some of TransAlta’s biggest markets and the company has accelerated planned maintenance while prices are low.

“These plans were put in place to improve reliability at our Alberta thermal units as well as to take advantage of the low ... prices we have seen in our core markets,” Steve Snyder, the company’s chief executive, said on a conference call.

TransAlta’s maintenance plan, along with an unplanned outage at an Alberta coal-fired plant cut electricity production by 8 percent, to 12.17 gigawatt hours from 12.23 GWh in the year-prior quarter.

Snyder said he expected output to bounce back in the second half of the year as the company completes the work.

The company said power prices in the U.S. northwest have dropped by half from last year, to $35 per megawatt hour while Alberta electricity prices have fallen 18 percent year-over-year.

Revenue in the quarter fell about 6 percent to C$756 million.

The company also said it plans a new wind power project in southern Alberta. The C$135 million Ardenville wind farm will generate up to 72 megawatts of power, enough electricity for 28,000 homes.

Construction is expected to begin in the first quarter of next year and be complete in early 2011.

TransAlta shares rose 24 Canadian cents to C$19.43 midafternoon on Tuesday on the Toronto Stock Exchange. ($1=1.22 Canadian) (Additional reporting by Krishna Chaithanya) (Reporting by Scott Haggett; Editing by Jeffrey Hodgson)

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