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TransAlta (TAC) Q2 Loss in Line with Estimates, Revises View

Zacks

TransAlta Corporation TAC reported second-quarter 2017 adjusted loss of 2 cents per share, in line with the Zacks Consensus Estimate.

Total Revenue

In second-quarter 2017, TransAlta’s total revenue of $374 million (C$503 million) surpassed the Zacks Consensus Estimate of $355 million by 6.5%. However, revenues were down 2.09% from $382 million (C$492 million) in the prior-year quarter.

Quarterly Highlights

During the second quarter, TransAlta’s cost of fuel, purchased power and other amounted to C$180 million ($134.9 million), increasing 3.5% year over year from C$174 million.

The company’s Operations, Maintenance and Administration amounted to C$127 million ($95.1 million) reflecting an increase of 4.1% year over year from C$122 million.

Total operating income in the reported quarter decreased 41.5% from C$41million year over year to C$24 million ($18 million).

Interest expenses decreased 4.8% from C$62 million year over year to C$59 million ($44.2 million).

Financial Update

Cash and cash equivalents were $38.5 million (C$50 million) as of Jun 30, 2017, falling significantly from $226.9 million (C$305 million) as of Dec 31, 2016.

Total of long-term net debt was at $2,856.7 million (C$3,709 million) as of Jun 30, 2017, lower than $2,896 million (C$3,893 million) as of Dec 31, 2016.

Cash used in operating activities was $48.5 million (C$63 million), decreased from $91.6 million (C$119 million) as of Jun 30, 2016.

TransAlta Corporation Price, Consensus and EPS Surprise

TransAlta Corporation Price, Consensus and EPS Surprise | TransAlta Corporation Quote


Guidance

TransAlta revised guidance for 2017 comparable EBITDA in the range of C$1,025-C$1,100 million from the previous outlook of C$1,025–C$1,135 million, Funds from Operations to be in the range of C$765–C$820 million, and Free Cash Flow to be in the range of C$270–C$310 million lowering its range from the previously announced outlook.

Performance of Other Utilities

Among other players from the industry that have reported second-quarter earnings, both WEC Energy Group WEC and Xcel Energy Inc. XEL beat the Zacks Consensus Estimate, while FirstEnergy Corporation FE reported earnings on par with the Zacks Consensus Estimate.

Zacks Rank

TransAlta carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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