TC Energy's Q1 Earnings Miss Estimates, Revenues Decline Y/Y

Core Insights - TC Energy Corporation (TRP) reported first-quarter 2025 adjusted earnings of 66 cents per share, missing the Zacks Consensus Estimate of 70 cents, and down from 92 cents in the same period last year [1] - The company's quarterly revenues were $2.5 billion, which also fell short of the Zacks Consensus Estimate by $18 million and decreased by 19.8% year over year [1] Financial Performance - Comparable EBITDA for the quarter was C$2.7 billion, up 1% from the previous year and exceeding model estimates by 2.4% [2] - The board declared a quarterly dividend of 85 Canadian cents per common share, payable on July 31, 2025 [2] Segment Performance - Canadian Natural Gas Pipelines reported a comparable EBITDA of C$890 million, a 5.2% increase year over year, driven by higher flow-through costs and contributions from Coastal GasLink [3] - U.S. Natural Gas Pipelines reported a comparable EBITDA of C$1.4 billion, indicating a 4.7% increase from the prior year [5] - Mexico Natural Gas Pipelines reported a comparable EBITDA of C$233 million, up 8.9% from the previous year but missing estimates [7] - Power and Energy Solutions saw a comparable EBITDA of C$224 million, down 30% from the previous year due to lower contributions from Bruce Power and lower realized power prices [8] Operational Metrics - Canadian Natural Gas Pipelines deliveries averaged 27.6 billion cubic feet per day (Bcf/d), an 8% increase compared to the first quarter of 2024 [4] - U.S. Natural Gas Pipelines' daily average flows reached 31 Bcf/d, reflecting a 5% increase year over year [6] - Mexico Natural Gas Pipelines flows averaged 3.1 Bcf/d, up 6% from the first quarter of 2024 [7] Capital Expenditures and Financial Position - As of March 31, 2025, capital investments amounted to C$1.8 billion, with cash and cash equivalents of C$2 billion and long-term debt of C$45 billion, resulting in a debt-to-capitalization ratio of 61.1% [10][11] Future Guidance and Projects - TC Energy plans to bring approximately C$8.5 billion in projects online in 2025, including the Southeast Gateway pipeline project, while maintaining a focus on high-return projects [12][13] - The company expects comparable EBITDA for 2025 to be between C$10.7 billion and C$10.9 billion, with capital expenditures projected between C$6.1 billion and C$6.6 billion [14] Project Highlights - The Southeast Gateway pipeline is ready for service, with all contracted capacity secured and approval of regulated rates expected by the end of May [15][16] - The Northwoods project, an expansion of the ANR system, has been approved and is expected to provide 0.4 Bcf/d of capacity by late 2029 [17] - The Unit 5 Major Component Replacement project, valued at C$1.1 billion, is set to commence in Q4 2026 [18]