CALGARY – TransCanada Corp, the company behind the controversial Keystone XL pipeline, reported a better-than-expected quarterly profit on Tuesday, helped by rising revenue and higher income from its existing Keystone systems.
Earnings before interest, taxes, depreciation and amortization from TransCanada’s Keystone pipeline system rose 32 percent to C$363 million (US$275.90 million) in the third quarter, helped by higher uncontracted volumes and a stronger U.S. dollar.
TransCanada’s stock was up 0.3 percent at C$44.35 in early trading.
The Calgary-based company hopes to expand its existing network with the controversial Keystone XL pipeline by carrying crude from Alberta’s oil sands to Nebraska and on to Gulf Coast refineries. Oil sands have long been a target of environmentalists because of their carbon-intensive production process.
TransCanada asked the U.S. government on Monday to suspend review of the proposed expansion, a move seen by many as an attempt to avoid a rejection by President Barack Obama and postpone a decision until after the November 2016 presidential election.
The request caught some investors by surprise.
“It would seem that TransCanada is looking to take a step back from the situation and hopefully return under more favorable conditions, possibly a more supportive Republican administration,” said Stan Wong, director of wealth management at ScotiaMcLeod.
While the newly elected federal Liberal government in Canada, to be sworn in Wednesday, has supported Keystone XL, the provincial left-leaning new Democratic government in Alberta has opposed the project.
Russ Girling, TransCanada’s president and chief executive officer, said the company’s diverse assets were performing well in a “challenging environment.”
TransCanada, which has been cutting jobs, said on Tuesday it expected further restructuring in the fourth quarter and into 2016.
Net income attributable to the company fell 12 percent to C$402 million, or 57 Canadian cents per share, from $457 million, or 64 cents, in the quarter.
Comparable earnings were 62 Canadian cents per share, above the average analyst estimate of 60 Canadian cents, according to Thomson Reuters I/B/E/S.
Revenue rose 20.1 percent to C$2.94 billion, beating the average estimate of C$2.67 billion.
($1 = 1.3157 Canadian dollars)
(With additional reporting by Nia Williams in Calgary, Euan Rocha in Toronto and Sneha Banerjee in Bengaluru; Editing by Maju Samuel, Ted Kerr and Jeffrey Benkoe)
This article was from Reuters and was legally licensed through the NewsCred publisher network.