Profit up threefold on hefty tax gainTransAlta profit up threefold on hefty tax gain
CALGARY, Alberta, July 21 (Reuters) - TransAlta Corp. (TA.TO: Quote, Profile, Research) posted a second-quarter profit that more than tripled on Friday, as Canada's biggest publicly traded power generator benefited from lower tax rates.
The Calgary-based company, which operates coal, gas and windpower generating facilities in Canada, the United States and Mexico, earned C$86.4 million ($76.5 million), or 43 Canadian cents a share, up from a year-earlier profit of C$25.8 million, or 13 Canadian cents a share.
The rise in earnings came despite lower profits for producing power, as the contribution from its core business dropped by C$6.6 million in the quarter on lower prices in some of its markets.
However Steve Snyder, TransAlta's chief executive, said prices are beginning to improve, particularly in the U.S. Pacific Northwest. The company's coal-fired Centralia plant in Washington state competes with hydro-electric facilities, which have a cost advantage during the spring, when water reservoirs fill from run-off.
"Electricity prices for the balance of 2006 are anticipated to be higher than those observed in the first half in all our markets," Snyder said on a conference call.
Before one-time gains and charges that included a gain of C$62.2 million, or 31 Canadian cents a share, from a reduction in tax expenses related to lower tax rates that came into effect during the quarter, earnings were C$31.1 million, or 16 Canadian cents a share.
The operating profit surpassed the average forecast of 10 Canadian cents a share from analysts polled by Reuters Estimates.
The company's revenue fell 3.6 percent to C$599 million while cash flow from operating activities fell 39 percent to C$66.8 million.
Availability, a measure of how much time generating units are capable of producing electricity, was 85.1 percent, compared with 84.1 percent in the same period last year.
TransAlta shares rose 18 Canadian cents to C$23.29 on the Toronto Stock Exchange. The stock is up 8.8 percent over the past 12 months, lagging an 11 percent gain in the exchange's broader composite index
($1=$1.14 Canadian)