CALGARY, Alberta - TransAlta Corporation (NYSE:TAC) reported a notable first-quarter earnings beat, with shares climbing 2.2% as the company surpassed analyst expectations.
The energy provider posted adjusted earnings per share (EPS) of Cdn$0.72, significantly higher than the Cdn$0.14 consensus estimate. However, revenue fell short of forecasts, coming in at Cdn$947 million against an anticipated Cdn$985.83 million.
Despite the revenue miss, the 23% increase in production from new facilities and the return to service of the Kent Hills wind facilities contributed to the strong operational performance. The company's diversified portfolio and hedging strategies have been effective in managing the decline in Alberta spot power prices, which dropped from $142 per MWh in the previous year to $99 per MWh due to milder weather and increased supply from new wind and solar projects.
TransAlta's President and CEO, John Kousinioris, expressed confidence in achieving the 2024 guidance, attributing the quarter's success to asset optimization and hedging strategies. "We continue to perform well while managing through the evolving markets of our operating portfolio, illustrating the advantage of our diversified fleet," Kousinioris said. He also highlighted the company's capital allocation strategy, including the repurchase of shares, which has seen $53 million deployed towards this effort, representing 35% of the $150 million target for 2024.
Looking forward, TransAlta provided guidance for adjusted EBITDA between $1,150 million and $1,300 million and free cash flow (FCF) in the range of $450 million to $600 million for the full year. The midpoint of the FCF guidance range, $525 million, is above the analyst consensus, indicating a positive outlook for the company's performance.
The company's first-quarter results and optimistic guidance reflect its resilience in a changing market environment and its ability to deliver value to shareholders through strategic capital allocation and a focus on growth in stable markets outside Alberta.
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