TransCanada Misses Where it Counts

TransCanada (TSX: TRP) reported earnings on Feb. 12. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), TransCanada met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share contracted significantly.

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

Revenue details
TransCanada reported revenue of $2.10 billion. The five analysts polled by S&P Capital IQ predicted revenue of $2.09 billion on the same basis. GAAP reported sales were 9.7% lower than the prior-year quarter's $2.32 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 $0.43. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.50 per share. GAAP EPS of $0.43 for Q4 were 17% lower than the prior-year quarter's $0.52 per share.

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 51.1%, 200 basis points better than the prior-year quarter. Operating margin was 30.4%, 210 basis points worse than the prior-year quarter. Net margin was 15.3%, 120 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.14 billion. On the bottom line, the average EPS estimate is $0.59.

Next year's average estimate for revenue is $9.18 billion. The average EPS estimate is $2.32.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 393 members out of 405 rating the stock outperform, and 12 members rating it underperform. Among 107 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 104 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 outperform, with an average price target of $48.01.

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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 position in any of the stocks mentioned. 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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Report this Comment On February 13, 2013, at 7:29 AM, tim443 wrote:

No time in the 10 second takeaway to mention the 5% increase in the dividend?
This is the thirteenth year in a row for a dividend increase.
Tim