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

TransAlta (NYSE:TAC) (TSE:TA) released its earnings results on Friday. The utilities provider reported ($0.04) earnings per share for the quarter, missing analysts’ consensus estimates of $0.05 by ($0.09), Zacks reports. TransAlta had a positive return on equity of 3.00% and a negative net margin of 7.39%.The business had revenue of $436.10 million during the quarter, compared to analysts’ expectations of $493.39 million.

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 Trading Up 5.3%

TAC traded up $0.70 during mid-day trading on Friday, hitting $13.73. 3,086,742 shares of the stock were exchanged, compared to its average volume of 1,307,485. The firm’s fifty day moving average is $12.90 and its two-hundred day moving average is $13.77. TransAlta has a 1-year low of $7.82 and a 1-year high of $17.88. The company has a market cap of $4.07 billion, a PE ratio of -28.59 and a beta of 0.78. The company has a current ratio of 0.79, a quick ratio of 0.71 and a debt-to-equity ratio of 5.22.

TransAlta Dividend Announcement

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

Institutional Trading of TransAlta

Large investors have recently modified their holdings of the stock. Caitong International Asset Management Co. Ltd acquired a new stake in shares of TransAlta in the 4th quarter valued at $37,000. Ritter Alpha LP purchased a new position in TransAlta in the fourth quarter valued at $131,000. Virtu Financial LLC acquired a new stake in TransAlta in the fourth quarter valued at $147,000. Orion Porfolio Solutions LLC purchased a new stake in TransAlta during the 2nd quarter worth about $159,000. Finally, Public Sector Pension Investment Board acquired a new position in shares of TransAlta during the 4th quarter worth about $194,000. Hedge funds and other institutional investors own 59.00% of the company’s stock.

Wall Street Analysts Forecast Growth

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

Key TransAlta News

Here are the key news stories impacting TransAlta this week:

• Positive Sentiment: TransAlta signed a memorandum of understanding with CPP Investments and Brookfield to develop a data‑centre at its Keephills site, with potential to scale to ~1 GW and TransAlta as exclusive site and power provider — a sizable new growth opportunity for contracted power and capacity. TransAlta Enters Memorandum-of-Understanding for Data Centre Development
• Positive Sentiment: The company announced a dividend increase in its Q4 release and provided a 2026 outlook, signaling management confidence and supporting income‑oriented investors. TransAlta Reports Fourth-Quarter and Year-End 2025 Results…
• Neutral Sentiment: Management scheduled an Investor Day in Toronto for March 23, 2026 — a forum where the company will lay out strategy, capital allocation and growth plans (could clarify pipeline/timing for the data‑centre and other projects). TransAlta to Host Investor Day
• Neutral Sentiment: Trading volume spiked on the NYSE, which can amplify price moves; higher volume accompanied today’s rally, suggesting active repositioning rather than a thin‑market bounce. TransAlta Jumps on NYSE Composite Volume Surge
• Negative Sentiment: Q4 results missed expectations: adjusted EPS of about $(0.044) vs consensus $0.05 and revenue $436.1M vs est. $493.4M — the shortfall and a reported negative net margin highlight near‑term operational/headwind risks. TransAlta Q4 2025 Earnings Call Transcript
• Negative Sentiment: Lower revenue and an EPS miss increase short‑term downside risk if 2026 guidance or cash flow from projects (including the data‑centre) is delayed or requires additional capital; investors should watch future cadence of contracted revenues and leverage metrics. Q4 Press Release / Slide Deck

About TransAlta

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.