Canada's TC Energy beats profit estimates on Mexico pipeline strength
- TC Energy expects potential tariffs to have minimal impact on U.S. and Canada projects
- Sees no impact of tariffs on Mexico projects
- Open to considering IPO or minority stake sale for Mexico operations
Canada pipeline operator TC Energy beat analysts' estimates for fourth-quarter profit on Friday, boosted by strength in its Mexican operations.
Unprecedented demand for natural gas across North America, primarily driven by higher LNG exports, retiring coal plants and data centers, has been benefiting the Canadian energy sector, but it now faces uncertainty due to impending U.S. tariffs.
TC Energy said it was assessing the situation after U.S. President Donald Trump threatened to impose tariffs on Canada and Mexico, but expects minimal impact on Canadian and U.S. projects and no impact on Mexico projects.
CEO François Poirier told analysts he was hopeful that Trump's latest decision to pause the tariffs for 30 days would allow the three countries to reach an agreement that would benefit customers across the continent.
The company said its Southeast Gateway Pipeline (SGP) in Mexico had achieved mechanical completion and was expected to go into service by May.
Poirier said the company was open to considering an IPO or a minority interest sale for its operations in Mexico.
TC Energy said last year it intends to decrease market exposure in the country by late 2025 or 2026.
The company's fourth-quarter total revenue rose 2% to C$3.58 B ($2.52 B), boosted by higher adjusted core earnings from Mexican natural gas pipelines, and power and energy solutions segments.
However, shares of the company fell over 2% after TC Energy's fourth-quarter core profit fell from a year earlier due to the sale of Portland Natural Gas Transmission System and lower earnings from the Coastal GasLink natgas pipeline compared to a year earlier when it had recognized a $200-MM incentive payment.
The company raised its quarterly dividend by 3.3% to 85 Canadian cents and posted an adjusted profit of C$1.05 per share, above analysts' average estimate of C$1.00, according to data compiled by LSEG.
($1 = 1.4181 Canadian dollars)
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