CALGARY, Alberta (Reuters) - TransCanada Corp (TRP.TO) said on Tuesday its fourth-quarter profit surged 40 percent, helped by recent pipeline acquisitions, and it boosted its quarterly dividend by 6 percent.
The company also warned that costs for refurbishment two 750-megawatt reactors at the massive Bruce nuclear plant in Ontario are again on the rise, climbing to $3 billion, up $250 million from its previous estimate -- and that is not expected to be the last increase.
"We have determined that it's highly likely that the cost is going to exceed C$3 billion," Hal Kvisle, TransCanada's chief executive, said on a conference call. "So we've increased the authorized funding for the project... It's likely there will be some further increase beyond $3 billion."
The managers of Bruce Power are reviewing the cost estimates and a new price tag for the work is expected in the second quarter, Kvisle said.
TransCanada, a big power producer and the operator of Canada's biggest natural gas pipeline network, earned C$377 million, or 70 cents a share, in the period ended Dec 31, up from a year-earlier $269 million, or 55 cents a share.
Comparable earnings, or income from continuing operations adjusted for specific items, were C$307 million, or 57 Canadian cents a share, up from $257 million, or 53 cents a share, for the same period of 2006.
Analysts had expected average earnings of 54 cents a share, according to Reuters Estimate.
"These were good operating results," said Steven Paget, an analyst at FirstEnergy Capital. "The pipelines all performed at or above our expectations."
TransCanada's pipeline business was boosted by last year's acquisition of El Paso Corp's EP.N ANR pipeline and gas storage business in the United States, and an improved performance from its mainline system from Alberta to central Canada and its GTN network to the U.S. Northwest.
But the pipelines' contribution was somewhat offset by weaker earnings for its North American power business, which includes its stake in the massive Bruce nuclear operation.
Revenue for the quarter was $2.19 billion, up 4.7 percent from $2.09 billion.
TransCanada also boosted its quarterly dividend by 6 percent to 36 Canadian cents a share.
The Alaska state government has selected TransCanada as the preferred builder for a US$26 billion pipeline to ship natural gas from the North Slope and recently gave a half share of its proposed US$5.2 billion Keystone export oil pipeline to ConocoPhillips (COP.N).
TransCanada shares rose 88 cents to $38.88 on Tuesday on the Toronto Stock Exchange. The shares have slipped 0.5 percent over the past 12 months.
Reporting by Scott Haggett and Scott Anderson; editing by Rob Wilson