July 31, 2008 / 5:49 PM / in 9 years

TransCanada profit surges on higher power prices

CALGARY, Alberta (Reuters) - Surging power prices in the Canadian province of Alberta helped TransCanada Corp’s

(TRP.TO) surpass expectations with a 26 percent rise in second-quarter profits.

TransCanada, the country’s biggest power and pipeline firm, said on Thursday that net income climbed to C$324 million ($318 million), or 58 Canadian cents a share, in the quarter from C$257 million, or 48 Canadian cents, in the year-earlier period.

Comparable net earnings, excluding most one-time items, rose 27 percent to C$316 million, or 57 Canadian cents a share, surpassing the average analyst profit forecast of 51 Canadian cents before items, according to Reuters Estimates.

The company’s gains came from the energy-squeezed Alberta power market, where a booming economy has spurred demand and pushed profits from TransCanada’s electricity division 61 percent higher, to C$151 million.

“The strength in the quarter was definitely the power side of the business, no doubt about it,” said Lanny Pendill, an analyst at Edward Jones. Alberta “power prices have gone up ... and TransCanada has plenty of exposure there.”

TransCanada is best known as the operator of the national and Alberta natural-gas pipeline system and the ANR pipeline network in the United States. But results from its pipeline business lagged previous year returns, falling 4.8 percent to C$158 million as regulated tolls fell.

The company recently announced plans to build a $7 billion pipeline from the Canadian oil sands to the refineries on the U.S. Gulf Coast. It’s also awaiting approval from Alaska legislators to begin planning a $26 billion natural gas pipeline from the state’s North Slope to southern markets.

TransCanada said funds from operations rose 13 percent to C$676 million from C$596 million.

Revenue dipped 9 percent to C$2.02 billion from C$2.21 billion.

TransCanada shares rose C$1.03, or 2.7 percent, to C$39.75 on Thursday on the Toronto Stock Exchange.

$1=$1.02 Canadian

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