TransAlta (NYSE:TAC) Releases Earnings Results, Beats Estimates By $0.02 EPS

TransAlta (NYSE:TAC) (TSE:TA) posted its earnings results on Friday. The utilities provider reported $0.13 EPS for the quarter, topping the consensus estimate of $0.11 by $0.02, Zacks reports. The business had revenue of $342.85 million during the quarter, compared to the consensus estimate of $379.54 million. TransAlta had a positive return on equity of 9.52% and a negative net margin of 9.46%.

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

• Solid second-quarter performance: TransAlta reported adjusted EBITDA of CAD 291 million, free cash flow of CAD 143 million, and fleet availability of 90.2%, reaffirming its 2026 guidance.
• The company’s Alberta hedging and optimization strategies mitigated weak market conditions; approximately 4,500 GWh for the remainder of 2026 and 6,600 GWh for 2027 are hedged at about CAD 64/MWh, well above current forward pricing.
• TransAlta agreed to acquire two Colorado gas peaking facilities for US$1 billion, expecting approximately CAD 110 million of annual, contracted adjusted EBITDA and immediate free-cash-flow-per-share accretion after the anticipated fourth-quarter 2026 closing.
• Alberta’s new data-center regulations may enable TransAlta to use underutilized gas-fired steam capacity to support AI infrastructure, with the company targeting greater clarity from AESO and continuing to advance its 230 MW partnership with CPP Investments and Brookfield.
• Alberta spot prices averaged only CAD 29/MWh, down from CAD 40/MWh a year earlier, while hydro and energy-marketing results declined; additionally, S&P shifted TransAlta’s BB+ credit-rating outlook to negative, increasing the importance of asset sales and balance-sheet improvement.

TransAlta Trading Down 2.8%

Shares of NYSE TAC opened at $12.50 on Friday. TransAlta has a 1-year low of $11.38 and a 1-year high of $17.88. The company has a 50-day moving average of $13.60 and a two-hundred day moving average of $13.18. The company has a market cap of $3.95 billion, a PE ratio of -23.15 and a beta of 0.69. The company has a current ratio of 0.76, a quick ratio of 0.70 and a debt-to-equity ratio of 6.61.

TransAlta Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, October 1st. Shareholders of record on Tuesday, September 1st will be paid a $0.07 dividend. The ex-dividend date of this dividend is Tuesday, September 1st. This represents a $0.28 dividend on an annualized basis and a dividend yield of 2.2%. TransAlta’s payout ratio is currently -35.19%.

Wall Street Analyst Weigh In

TAC has been the subject of several recent analyst reports. TD Cowen started coverage on TransAlta in a research note on Wednesday, June 10th. They set a “buy” rating for the company. BMO Capital Markets began coverage on shares of TransAlta in a research report on Wednesday, June 10th. They set an “outperform” rating for the company. Zacks Research downgraded shares of TransAlta from a “hold” rating to a “strong sell” rating in a report on Friday, July 17th. TD Securities restated a “buy” rating on shares of TransAlta in a research report on Thursday, May 7th. Finally, Scotiabank raised shares of TransAlta to a “strong-buy” rating in a report on Wednesday, June 10th. One analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating and two have issued a Sell rating to the stock. According to MarketBeat.com, TransAlta has an average rating of “Moderate Buy” and an average price target of $23.00.

Key Stories Impacting TransAlta

Here are the key news stories impacting TransAlta this week:

• Positive Sentiment: TransAlta delivered adjusted earnings of $0.13 per share, exceeding the $0.11 analyst consensus estimate by $0.02. Management also described operational performance as strong across its diversified power portfolio and reaffirmed its full-year guidance, supporting expectations for reliable cash flow. TransAlta Reports Strong Second Quarter Results and Reaffirms Guidance
• Positive Sentiment: The company declared a quarterly dividend of $0.07 per share, equivalent to an annualized yield of approximately 2.2%. The dividend is payable October 1 to shareholders of record September 1, providing ongoing income support for investors.
• Neutral Sentiment: The earnings release highlighted dependable free-cash-flow generation and portfolio diversification, but the supplied reports did not provide enough additional detail on revenue, cash flow, or segment performance to determine whether results materially changed the company’s valuation outlook. TransAlta Q2 Earnings Snapshot
• Negative Sentiment: The earnings beat did not translate into a favorable market reaction. TransAlta continues to report a negative net margin of 9.46%, while its high debt-to-equity ratio and current ratio below 1 indicate leverage and liquidity risks that may be limiting investor enthusiasm despite the reaffirmed outlook.

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of the stock. Virtu Financial LLC bought a new position in TransAlta in the 4th quarter valued at $147,000. Tudor Investment Corp ET AL lifted its stake in shares of TransAlta by 2,821.5% during the fourth quarter. Tudor Investment Corp ET AL now owns 404,429 shares of the utilities provider’s stock valued at $5,112,000 after acquiring an additional 390,586 shares during the period. Twinbeech Capital LP bought a new position in TransAlta in the fourth quarter valued at about $420,000. Man Group plc increased its position in TransAlta by 159.9% in the fourth quarter. Man Group plc now owns 2,098,053 shares of the utilities provider’s stock worth $26,520,000 after purchasing an additional 1,290,854 shares during the period. Finally, Investment Management Corp of Ontario bought a new stake in TransAlta during the 4th quarter worth about $410,000. Institutional investors own 59.00% of the company’s stock.

TransAlta Company Profile

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.