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A pedestrian walks past the TransAlta building in downtown Calgary, Monday, Oct. 5, 2009. (Jeff McIntosh/The Canadian Press)
A pedestrian walks past the TransAlta building in downtown Calgary, Monday, Oct. 5, 2009. (Jeff McIntosh/The Canadian Press)

TransAlta profit tumbles Add to ...

TransAlta Corp. says second-quarter profits were nearly a fifth of what they were a year ago, affected by hedging and a tax gain booked a year earlier.

The Calgary-based power generation company reported net earnings attributable to common shareholders of $12-million, or 5 cents per share.

That's a decline from $63-million, or 29 cents per share, in the same period last year.

Comparable earnings per share were 29 cents, coming in above analyst expectations of 15 cents, according to a survey by Thomson Reuters.

Revenue dropped to $515-million, falling short of analyst predictions of $597-million, and also weaker than $547-million a year earlier.

The results were weaker due to a one-time $30-million tax gain logged in the comparable quarter of 2010.

TransAlta said it also was affected by hedging contracts that settled this quarter which the company said equates to a $42-million impact on the results. TransAlta produces and markets electricity, most of which is powered by coal. Its plants also run on natural gas, hydro, biomass, wind and geothermal sources.

Earlier this year, it announced plans to build a 66-megawatt wind project on Quebec's Gaspe Peninsula at a cost of around $205-million.

In February, TransAlta said units at its Sundance coal-fired power plant in Alberta could not be repaired economically and must be shut down permanently - ending a power purchase agreement with TransCanada Corp. about six years before it was to end.

Observers have said TransAlta's move may set the stage for a fight with TransCanada.

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