CALGARY— TransAlta Corp., the Canadian power generator that has become atakeover target, said Thursday its second-quarter profit fell 18 percent in comparison with a year-earlier result that was inflated byasset sales.
Earlier this month two private U.S. funds, LS Power Equity Partners andGlobal Infrastructure, which together own 9 per cent of TransAlta,proposed a $7.8-billion, $39 a share, takeover of the electricitygenerator, saying they believe the market is undervaluing the stock.
Then another TransAlta investor, Seneca Capital, urged the board to consider auctioning itself off to boost shareholder value.
However the company said in its earnings release Thursday that it is still not ready to detail a response to its shareholders.
“On July 18, TransAlta received a nonbinding letter from LS PowerEquity Partners and Global Infrastructure Partners regarding engagingin a dialogue about a possible acquisition of TransAlta,” the companysaid. “Once the board is in a position to respond to the letter, itwill do so through a press release.”
TransAlta, which runs coal and gas-fired power plants and renewableenergy facilities in Canada and the United States, said net income inthe quarter dropped 18 per cent to $47-million, or 24 cents a share,down from year-earlier $57-million, or 28 cents.
But after stripping out year-earlier asset sales, comparable profitincreased to $49-million, or 25 cents a share, from $42-million, or 20cents a share.
Analysts on Reuters Estimates had forecast, on average, a profit of 23 cents a share.
Revenue rose 16 per cent to $708-million from $612-million.
TransAlta said its results were buoyed by higher electricity prices inAlberta and the Pacific Northwest and higher energy trading grossmargins. Those gains were offset partly by lower generation grossmargins because of a planned outage at its Centralia coal-fired powerplant in Washington state and unplanned outages at its Alberta poweroperations.