Canadian Manufacturing

TransCanada drops Keystone bombshell as Q3 profit slips

TransCanada has asked the U.S. government to suspend the review of its stalled Keystone XL pipeline

CALGARY—TransCanada Corp.’s third-quarter profit was down from the same time last year as it received lower contributions from its Bruce Power and Western Power electricity generation operations, and a small charge related to corporate restructuring.

The Calgary-based pipeline and energy company’s net income was $402 million or 57 cents per share, which was down $55 million from the same time last year.

A $6-million charge related to restructuring was included in the net income, which was down from $457 million or 64 cents per share for the same period in 2014.

Excluding the restructuring and items related to its risk management activities, TransCanada had $440 million or 62 cents per share of comparable earnings—down from $450 million or 63 cents per share in last year’s third quarter.

It says Bruce Power had more planned outages and higher operating expenses than during last year’s third quarter. It says Western Power’s earnings were down as a result of lower realized prices for electricity.

Those declines were partly offset by higher earnings from the Keystone pipeline system—which includes an operational pipeline—and other power businesses.

Total revenue was up year-over-year, rising to $2.94 billion from $2.45 billion.

The earnings report was issued early Tuesday, hours after TransCanada announced Monday evening that it has asked the U.S. government to suspend the review of its stalled Keystone XL pipeline system—which has cost US$2.4 billion so far.

The surprise move could have a political ripple-effect in two countries by potentially making the pipeline a 2016 U.S. election issue to be settled by the next president.

Monday’s request from TransCanada Corp. adds a new twist to one of the biggest Canada-U.S. political irritants of recent years,

The U.S. said it was reviewing a letter to Secretary of State John Kerry, in which the Calgary-based company requested a delay while the Nebraska stretch of the pipeline remains disputed.

“TransCanada believes that it would be appropriate at this time for the State Department to pause in its review of the Presidential Permit application for Keystone XL,” said the letter.

“This will allow a decision on the permit to be made later based on certainty with respect to the route of the pipeline.”

It’s also an about-face in the company’s message. Until recently, it would have been unimaginable for TransCanada or its government backers in Ottawa to be requesting a delay, given their repeated demands for immediate approval of a project that would carry nearly one-quarter of all Canadian oil exports.

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