TORONTO (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 six percent.
The company also warned that costs for its half share in the refurbishment of the massive Bruce nuclear plant in Ontario are again on the rise, climbing to C$3 billion, up C$250 million from its last estimate.
TransCanada, a big power producer and operator of Canada's biggest natural gas pipeline networks, earned C$377 million, or 70 Canadian cents a share, in the period ended Dec 31, up from a year-earlier C$269 million, or 55 Canadian 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 C$257 million, or 53 Canadian cents a share, for the same period of 2006.
Analysts were expecting an average earnings of 54 Canadian 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 a stake in Ontario's massive Bruce nuclear facility.
The partners at Bruce, a 8-reactor facility on the shore of Lake Huron capable of supplying nearly a quarter of Ontario's electricity demand, are refurbishing some of its reactors to extend their life.
TransCanada said the cost of revamping 2 of those reactors grew to a total C$3 billion, and said costs will rise further as the two 750-megawatt reactors are restarted. It didn't say what had sparked the increase.
Revenue for the quarter was C$2.19 billion, up 4.7 percent from C$2.09 billion.
TransCanada also boosted its quarterly dividend by six 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 91 Canadian cents to C$38.91 on Tuesday on the Toronto Stock Exchange. The shares have fallen 2.7 percent over the past 12 months.
Reporting by Scott Haggett and Scott Anderson; editing by Janet Guttsman