TransAlta (TAC) Q2 Loss In Line With Estimates, Revises View

TransAlta Corporation (NYSE: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

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 (NYSE:WEC) and Xcel Energy Inc. (NYSE:XEL) beat the Zacks Consensus Estimate, while FirstEnergy Corporation (NYSE: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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