TC Energy misses its profit forecast due to weakness in US operations and power business

Canada's TC energy missed its third-quarter profit estimates on Thursday due to weakness in the company's U.S. operations, power and energy solutions businesses and pipeline operations.

Natural gas consumption is increasing due to AI-driven power demands, industrial applications, and LNG exports. However, price pressures and the competition from coal are still a major market challenge.

U.S. Natural Gas Futures declined over 4% sequentially. This is a continuation of a downward trend that began in the 2nd quarter, after four consecutive quarters with gains.

Transport volumes at TC Energy were affected by the drop in prices.

The company's U.S. Natural Gas Pipelines, its largest division, saw its net income fall to C$801 (US$571.16) million in the third quarter from C$1.3billion a year earlier.

The adjusted core profit for the Power and Energy Solutions business in the third quarter was C$266 millions, down 18.4% compared to a year earlier.

The company's Canadian natural gas pipelines, however, saw core earnings adjusted to C$913 millions in the quarter ending September 30 from C$845million a year earlier.

The company has a network of pipelines that spans 58,100 miles and supplies more than 30% daily of the natural gas used in North America.

The company anticipates that its core adjusted profit in 2026 will be between $11.6 and $11.8 billion. This represents a growth of 6% to 8% year-over-year.

The company also expects core profits to range between $12.6 billion and 13.1 billion in 2028, which represents a growth rate of 5% to 7 % per year between 2025 to 2028.

LSEG data shows that the Calgary-based firm earned 77 Canadian Cents per share on a adjusted basis for the third quarter, compared to the analysts' expectation of 80 Canadian Cents.

(source: Reuters)