TransAlta (NYSE:TAC) Posts Quarterly Earnings Results, Misses Expectations By $0.09 EPS

by · The Markets Daily

TransAlta (NYSE:TAC – Get Free Report) (TSE:TA) released its quarterly earnings data on Friday. The utilities provider reported ($0.04) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.05 by ($0.09), Zacks reports. The firm had revenue of $436.10 million during the quarter, compared to analyst estimates of $493.39 million. TransAlta had a negative net margin of 7.39% and a positive return on equity of 3.00%.

Here are the key takeaways from TransAlta’s conference call:

  • MOU with CPP Investments and Brookfield to develop a data center at Keephills makes TransAlta the exclusive site and power provider, with an initial ~230 MW long‑term PPA and the option to evaluate up to 1 GW of additional phased demand; definitive agreements are expected to be completed this year.
  • Centralia Unit Two conversion tolled to Puget Sound Energy (700 MW) will be fully contracted to 2044 and requires ~CAD 600M capex with a target COD in late 2028 and FID aimed for early 2027, but the plant’s temporary DOE 202(c) order and its cessation of operations at end‑2025 will weigh on 2026 EBITDA and free cash flow until conversion.
  • TransAlta reported 2025 Adjusted EBITDA of CAD 1.1 billion and Free Cash Flow of CAD 514 million (above midpoint), achieved record safety and 92.3% fleet availability, amended CAD 2.1 billion committed credit facilities to boost financial flexibility, and the board approved an 8% dividend increase to CAD 0.28 per share.
  • Portfolio actions and M&A progress include the closed acquisition of Far North Power (≈310 MW for CAD 95M, ~CAD 30M annual Adjusted EBITDA with ~68% contracted to 2031), mothballing Sundance Six and Sheerness One to reduce near‑term costs while preserving optionality, full Heartland integration, and advancement of three gas projects to support future load growth.

TransAlta Stock Performance

TAC stock traded up $0.70 during trading on Friday, reaching $13.73. The company had a trading volume of 3,086,742 shares, compared to its average volume of 1,307,485. The company has a market cap of $4.07 billion, a price-to-earnings ratio of -28.59 and a beta of 0.78. TransAlta has a twelve month low of $7.82 and a twelve month high of $17.88. The company has a debt-to-equity ratio of 5.22, a quick ratio of 0.71 and a current ratio of 0.79. The firm has a 50-day simple moving average of $12.90 and a 200-day simple moving average of $13.77.

TransAlta Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, April 1st. Investors of record on Sunday, March 1st will be given a $0.065 dividend. This represents a $0.26 annualized dividend and a dividend yield of 1.9%. The ex-dividend date of this dividend is Friday, February 27th. TransAlta’s dividend payout ratio (DPR) is presently -39.58%.

Key Headlines Impacting TransAlta

Here are the key news stories impacting TransAlta this week:

  • Positive Sentiment: TransAlta signed an MOU with CPP Investments and Brookfield to develop a data‑centre at its Keephills site, with potential to scale up to 1 GW and TransAlta named exclusive site and power provider — a new revenue & capacity pathway tied to demand for clean, hosted power. Read More.
  • Positive Sentiment: The company announced a dividend increase alongside its Q4 results and provided a 2026 outlook, which supports income-oriented investor sentiment and helps offset the headline earnings miss. Read More.
  • Positive Sentiment: Shares rose with above‑average volume after the releases; market commentary noted a jump on the NYSE composite and heavy trading, signaling investor appetite for the strategic items despite the miss. Read More.
  • Neutral Sentiment: TransAlta scheduled an Investor Day for March 23 in Toronto to provide deeper strategy and outlook detail — this gives management a forum to shore up guidance and answer investor questions, which could clarify medium‑term expectations. Read More.
  • Neutral Sentiment: Company released its Q4 slide deck and hosted the earnings call (transcript available). Investors can use the slides/call to assess drivers behind the results and the 2026 outlook. Read More.
  • Negative Sentiment: TransAlta missed Q4 EPS and revenue expectations — reported EPS was negative versus a small expected profit, and revenue fell short of consensus; the quarter showed a negative net margin, which explains part of the shortfall in near‑term profitability. Read More.

Analyst Upgrades and Downgrades

Several equities analysts have issued reports on the stock. Weiss Ratings restated a “sell (d+)” rating on shares of TransAlta in a research report on Wednesday, January 21st. National Bank Financial downgraded TransAlta from a “strong-buy” rating to a “hold” rating in a report on Wednesday, December 3rd. Zacks Research raised TransAlta from a “strong sell” rating to a “hold” rating in a research note on Friday, December 5th. TD Securities restated a “buy” rating on shares of TransAlta in a research report on Wednesday, December 10th. Finally, Royal Bank Of Canada reaffirmed an “outperform” rating on shares of TransAlta in a research note on Monday, November 10th. Five research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and an average target price of $20.00.

View Our Latest Stock Report on TransAlta

Hedge Funds Weigh In On TransAlta

Several hedge funds have recently made changes to their positions in TAC. Creative Planning grew its stake in TransAlta by 2.0% during the 3rd quarter. Creative Planning now owns 52,339 shares of the utilities provider’s stock valued at $715,000 after purchasing an additional 1,003 shares during the last quarter. Vanguard Personalized Indexing Management LLC raised its position in TransAlta by 4.7% during the fourth quarter. Vanguard Personalized Indexing Management LLC now owns 40,546 shares of the utilities provider’s stock worth $513,000 after acquiring an additional 1,814 shares during the period. CANADA LIFE ASSURANCE Co raised its position in TransAlta by 5.7% during the third quarter. CANADA LIFE ASSURANCE Co now owns 34,051 shares of the utilities provider’s stock worth $464,000 after acquiring an additional 1,827 shares during the period. Caitong International Asset Management Co. Ltd purchased a new position in TransAlta during the fourth quarter valued at $37,000. Finally, Raymond James Financial Inc. boosted its holdings in TransAlta by 7.0% in the 3rd quarter. Raymond James Financial Inc. now owns 62,471 shares of the utilities provider’s stock worth $854,000 after buying an additional 4,110 shares during the last quarter. 59.00% of the stock is owned by institutional investors and hedge funds.

TransAlta Company Profile

(Get Free Report)

TransAlta Corporation, originally founded in 1909 as Calgary Power Company Ltd., is a publicly traded energy company specializing in the development, ownership and operation of power generation and transmission assets. Headquartered in Calgary, Alberta, TransAlta has grown from its early hydroelectric roots into a diversified energy provider with a multi-fuel generating fleet.

The company’s core business activities encompass power generation, asset management and energy trading services.

Recommended Stories