TransCanada Misses Where it Counts

TransCanada (TSX: TRP) reported earnings on Oct. 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), TransCanada beat slightly on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share didn't change.

Gross margins shrank, operating margins dropped, net margins grew.

Revenue details
TransCanada reported revenue of $2.16 billion. The five analysts polled by S&P Capital IQ looked for sales of $2.13 billion on the same basis. GAAP reported sales were 6.3% lower than the prior-year quarter's $2.30 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.51. The 13 earnings estimates compiled by S&P Capital IQ averaged $0.53 per share. GAAP EPS of $0.53 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 48.5%, 370 basis points worse than the prior-year quarter. Operating margin was 32.4%, 350 basis points worse than the prior-year quarter. Net margin was 18.0%, 140 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.28 billion. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $8.00 billion. The average EPS estimate is $2.04.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 394 members out of 405 rating the stock outperform, and 11 members rating it underperform. Among 95 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 92 give TransCanada a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on TransCanada is hold, with an average price target of $47.42.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

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