TransCanada Misses Where it Counts

Just the facts, Fool.

Seth Jayson
Seth Jayson
Feb 12, 2013 at 12:00AM
Other

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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