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TransCanada CEO Hal Kvisle

Oil and gas pipeline company TransCanada Corp. is increasing its dividend following a 37.5-per-cent jump in fourth-quarter profit.

The Calgary-based company, which is also active in power generation, announced Tuesday that its net income attributable to common shares rose to $381-million in the quarter, up from $277-million a year earlier.

That equated to 56 cents per common share, up from 47 cents in the fourth quarter of 2008.

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After adjusting for one-time items the company believes don't reflect the underlying trend of it business, TransCanada's comparable earnings were $328-million or 48 cents per share, versus $271-million or 46 cents per share in the prior-year period.

A consensus estimate compiled by Thomson Reuters had called for TransCanada to report earnings of 51 cents per share, up from 46 cents a year earlier.

UBS Investment Research said in a brief note that the miss was equally weighted between TransCanada's pipeline segment and its power segment.

The company's revenue fell by $126-million or 5.4 per cent from a year earlier to $2.2-billion in the last three months of 2009.

TransCanada increased its quarterly dividend to 40 cents per share, the equivalent of $1.60 per year, up 5 per cent.

For the year as a whole, TransCanada had $8.97-billion in revenue, $1.37-billion of net income applicable to common shares and comparable (adjusted) earnings of $1.33-billion. That compared with 2008 annual revenue of $8.62-billion, $1.44-billion of profit and $1.3-billion of adjusted earnings.

"Our 2009 financial results highlight our ability to generate strong earnings and cash flow from a diverse portfolio of North American energy infrastructure assets," Hal Kvisle, TransCanada's president and CEO, said in a statement.

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"Looking forward, we expect that our $22-billion capital program will lead to significant growth in cash flow and earnings over the next five years as a number of attractive, low-risk projects are placed into service. This has enabled our board of directors to increase the dividend on common shares for the tenth consecutive year."

TransCanada shares opened Tuesday at $34.50 but rose in later trading to $34.85, up from Monday's close of $34.65 at the Toronto Stock Exchange.

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