CALGARY, Alberta (Reuters) - TransCanada Corp's (TRP.TO) first-quarter profit rose 69 percent, reflecting bigger contributions from its pipeline and power units, one-time gains and benefits from investments in key markets, the country's biggest pipeline company said on Friday.
TransCanada, best known as the main operator of the national and Alberta natural-gas pipeline systems and the ANR pipelines in the United States, earned C$449 million ($442 million), or 83 Canadian cents a share, up from a year-earlier C$265 million, or 52 Canadian cents share.
Earnings excluding one-time items such as the investment gains jumped to C$326 million, or 60 Canadian cents per share, from C$250 million, or 49 Canadian cents per share, in the year-ago quarter.
Analysts, on average, had forecast profit of 55 Canadian cents a share, according to Reuters Estimates.
"Earnings in the pipeline segment were 11 percent better than expected, driven by strong results from ANR and the Canadian mainline, where incentive payments boosted earnings 10 percent above our estimate, Grant Hofer, an analyst at UBS Securities wrote in a note to clients.
"In the energy segment, stronger pricing drove earnings 7 percent above expectations."
The 2008 adjusted figure excludes C$152 million realized on shares from the Calpine bankruptcy settlement, C$10 million from a lawsuit settlement and a C$12 million loss from fair value adjustments.
The company also took a C$27 million charge on costs for the Broadwater liquefied natural gas (LNG) terminal in the waters of Long Island Sound.
New York's governor nixed the joint venture with Royal Dutch Shell (RDSa.L) this month, despite regulatory approvals. Governor David Paterson said it "was fundamentally wrong" to privatize open water.
It was the latest in a series of setbacks for TransCanada's LNG strategies. Earlier this year its plans to partner with Petro-Canada PCA.TO to build a terminal in Quebec had to be shelved when Russia's Gazprom (GAZP.MM) backed out of plans to supply the facility.
As well, TransCanada had to walk away from a terminal proposed for Maine's coast in 2004 when the small town where it was to be located voted against the proposal.
Despite the charge, Hal Kvisle, TransCanada's chief executive, told reporters after the company's annual meeting that the Broadwater project might not yet be dead.
"The writedown signaled that the project has gone from being aggressively under development to (one) that may or may not proceed," he said. "But we acknowledge that the rejection by the governor has thrown the project into some doubt."
For the quarter, the company's revenue fell 5 percent to C$2.1 billion from C$2.2 billion.
Funds generated from operations rose to C$922 million from C$582 million, and the company declared a quarterly dividend of 36 Canadian cents per share.
TransCanada has spent this year floating new gas pipeline proposals in the U.S. Rocky Mountains region and trying to advance long-term projects such as the $26 billion Alaska pipeline project.
It also expanded its power-generation business with the $2.9 billion purchase of the 2,480 megawatt Ravenswood generating station in the New York City borough of Queens.
TransCanada shares were down 9 Canadian cents at C$36.42 on Friday afternoon on the Toronto Stock Exchange. The shares have fallen 6.8 percent over the past 12 months.
Reporting by Scott Haggett and Susan Taylor