Core Viewpoint - TC Energy slightly missed analyst estimates for Q3 earnings but anticipates significant growth in North American natural gas demand due to rising U.S. LNG exports and increased power demand from data centers and coal-to-gas conversions [1][4]. Company Performance - TC Energy's Q3 earnings in the U.S. natural gas pipelines segment fell to US$568 million (C$801 million), down from US$943 million (C$1.33 billion) a year earlier [2]. - The power and energy solutions segment also experienced a nearly 50% decline in earnings compared to the previous year [3]. - Comparable earnings for TC Energy were reported at US$0.55 (C$0.77) per common share, slightly below the analyst consensus estimate of US$0.56 (C$0.79) [3]. Future Outlook - The company projects North American natural gas demand to increase by 45 billion cubic feet per day (Bcf/d) by 2035, driven by a tripling of LNG exports and unprecedented power demand [6]. - TC Energy's president and CEO highlighted favorable structural trends in North America's energy landscape, including growing demand and regulatory support, which reinforce confidence in long-term growth [5]. - A Goldman Sachs report indicates that natural gas is well-positioned to capture growth due to its flexibility and status as an abundant domestic resource [7].

Core Insights - TC Energy reported quarterly earnings of $0.56 per share, matching the Zacks Consensus Estimate, but down from $0.76 per share a year ago [1] - The company generated revenues of $2.69 billion for the quarter, exceeding the Zacks Consensus Estimate by 1.87%, but down from $2.99 billion year-over-year [2] - TC Energy's stock has increased by approximately 8.2% since the beginning of the year, compared to a 15.6% gain in the S&P 500 [3] Earnings Performance - The company has surpassed consensus EPS estimates two times in the last four quarters [1] - TC Energy has topped consensus revenue estimates three times over the last four quarters [2] Future Outlook - The company's earnings outlook will be influenced by management's commentary during the earnings call [3] - Current consensus EPS estimate for the upcoming quarter is $0.70 on revenues of $2.95 billion, and for the current fiscal year, it is $2.61 on revenues of $10.91 billion [7] Industry Context - The Alternative Energy - Other industry, to which TC Energy belongs, is currently ranked in the bottom 37% of over 250 Zacks industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions [5]

Financial Data and Key Metrics Changes - Comparable EBITDA increased by 10% year over year, reaching $2.7 billion in the third quarter [34] - The company expects 2025 net capital expenditures to be at the low end of the $5.5 billion-$6 billion range, with a long-term target of 4.75 times debt to EBITDA [7][36] - The company reaffirmed its 2025 outlook for comparable EBITDA growth of 7%-9% from 2024 to 2025 [36] Business Line Data and Key Metrics Changes - The natural gas pipelines segment saw a 13% increase in EBITDA, while the power and energy solutions segment experienced an 18% reduction [34] - Bruce Power achieved 94% availability, aligning with the expected annual availability in the low 90% range for full year 2025 [34] - The U.S. natural gas business recorded a 15% increase in LNG flows, setting a new peak delivery record of 4 bcf per day [32] Market Data and Key Metrics Changes - In Canada, natural gas demand from power generation has increased by 80% over the past five years [15] - The Mexican government plans to add 8 gigawatts of new installed natural gas capacity by 2030, with TC Energy's assets positioned to support this growth [9] - The natural gas forecast has been revised 5 bcf a day higher, anticipating a 45 bcf a day increase in demand by 2035 [9] Company Strategy and Development Direction - The company is focused on low-risk, high-return growth, emphasizing brownfield in-corridor expansions [11][41] - A disciplined approach to capital allocation is maintained, ensuring investments maximize returns and long-term value for shareholders [12][41] - The company is leveraging technological innovations and operational excellence to enhance project execution and capital efficiency [21][23] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the supportive regulatory environment across North America, which is expected to facilitate project delivery [8] - The company anticipates continued strong performance driven by increasing demand for natural gas and power generation [36][41] - Management highlighted the importance of human capital and execution excellence in maintaining growth momentum [46][70] Other Important Information - The company sanctioned $5.1 billion in new projects over the last 12 months, with a weighted average build multiple of 5.9 times [6][12] - The company is the only midstream operator with significant interest in nuclear power generation, positioning it uniquely in the energy market [10][14] Q&A Session Summary Question: Long-term EBITDA growth trajectory - Management indicated that if current return levels are maintained, mid-single-digit CAGR growth could continue beyond 2028 [44] Question: Potential for increased capital expenditure - Management stated that while the current target is $6 billion, there may be opportunities to exceed this level depending on project execution and market conditions [46] Question: Size and complexity of projects - Management noted that projects are becoming larger but remain straightforward, with average project sizes around $500 million [52] Question: Project backlog and capacity - Management confirmed that they have not turned down any projects due to capital constraints and expect to maintain a robust project backlog [55] Question: Strategic decision to focus on transmission - Management explained that focusing on transmission allows for lower-risk, compelling returns while meeting the needs of utility customers [59]

Financial Data and Key Metrics Changes - Comparable EBITDA increased by 10% year-over-year, reaching $2.7 billion in the third quarter [31] - The company expects 2025 net capital expenditures to be at the low end of the $5.5 billion-$6 billion range, with a long-term target of 4.75x debt to EBITDA [7][39] - The company generated over $5 billion in new high-quality executable projects sanctioned over the last 12 months [10][12] Business Line Data and Key Metrics Changes - The U.S. natural gas business saw LNG flows increase by 15% this quarter, setting a new peak delivery record of 4 bcf per day [30] - Bruce Power achieved 94% availability, contributing to the overall performance of the power and energy solutions segment [31] - EBITDA from the natural gas pipelines network increased by 13%, while the power and energy solutions segment saw an 18% reduction [31] Market Data and Key Metrics Changes - Natural gas demand from power generation in Alberta increased by 80% over the past five years [14] - The company is positioned to supply 20% of Mexico's gas-to-power plants and will feed 80% of new public tender natural gas generation projects entering service over the next five years [15] - The natural gas forecast has been revised 5 bcf a day higher, now calling for a 45 bcf a day increase in natural gas demand by 2035 [9] Company Strategy and Development Direction - The company is focused on maximizing asset value through safety and operational excellence while leveraging commercial and technological innovation [39] - The strategy includes prioritizing low-risk, high-return growth and maintaining financial strength and agility [39] - The company aims to capitalize on the growing demand for power generation and data centers, with a pipeline of origination opportunities exceeding 7 billion cu ft per day [17] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the supportive regulatory environment in Canada and the U.S., which is expected to streamline project delivery [8] - The company anticipates continued strong performance with year-over-year growth of 6%-8% expected in 2026 [33] - Management highlighted the importance of human capital and execution excellence in maintaining project performance [44][66] Other Important Information - The company has sanctioned an additional $5.1 billion of primarily brownfield projects, predominantly in the U.S. natural gas pipeline business unit [35] - The company is leveraging AI and technology to enhance operational efficiency and reduce emissions [20][21] - The Bruce Power Major Component Replacement program is expected to extend reactor life until at least 2064, improving availability and financial results [24][28] Q&A Session Summary Question: Long-term EBITDA growth trajectory - Management indicated that if current return levels remain, mid-single-digit CAGR growth could be sustained beyond 2028 [41][42] Question: Potential for increased capital expenditure - Management stated that while the current target is $6 billion, there may be opportunities to scale up if project execution remains strong and human capital is sufficient [43][44] Question: Size and complexity of projects - Management clarified that while projects are becoming larger, they remain straightforward in execution, with an average project size around $500 million [49][50] Question: Project backlog and capacity - Management confirmed that they have not turned down any projects due to capital constraints and expect to grow their backlog alongside EBITDA growth [51][53] Question: Strategic decision to focus on transmission - Management explained that focusing on transmission allows for lower-risk, compelling returns while meeting the needs of utility customers [57] Question: Status of Bruce C project - Management reported progress towards FID for Bruce C, with ongoing assessments and funding discussions [58][60] Question: Rate cases and potential toll increases - Management confirmed that several rate cases are in process, with conservative estimates included in forecasts [63] Question: Challenges with contractors and market pressures - Management noted that while industry backlogs are building, they have not faced material impacts yet and are actively monitoring suppliers [64][66]

Financial Data and Key Metrics Changes - Comparable EBITDA increased by 10% year over year, reaching $2.7 billion in the third quarter [30] - The company expects 2025 net capital expenditures to be at the low end of the $5.5 billion-$6 billion range, with a clear line of sight to achieving a long-term target of 4.75 times debt to EBITDA [5][10] - The implied weighted average unlevered after-tax IRR of the sanctioned portfolio increased to approximately 12.5%, up from 8.5% a few years ago [10] Business Line Data and Key Metrics Changes - The U.S. natural gas business saw LNG flows increase by 15% this quarter, setting a new peak delivery record of 4 bcf per day [29] - Bruce Power achieved 94% availability, aligning with the expected annual availability in the low 90% range for full year 2025 [30] - The power and energy solutions segment experienced an 18% reduction in EBITDA, primarily due to the dual-unit Major Component Replacement (MCR) outage program [30] Market Data and Key Metrics Changes - In Canada, natural gas demand from power generation has increased by 80% over the past five years [12] - Mexico's daily gas imports are averaging 4% higher in 2025 than in 2024, with the highest peak import day recorded at over 8 bcf a day [29] - The natural gas forecast has been revised 5 bcf a day higher, now calling for a 45 bcf a day increase in natural gas demand by 2035 [7] Company Strategy and Development Direction - The company remains focused on low-risk, high-return growth, emphasizing the execution of projects on time and on budget [38] - The strategic focus includes maximizing the value of existing assets through safety and operational excellence while leveraging commercial and technological innovation [38] - The company is positioned to capture growth in the energy market, particularly in natural gas and power generation, with a strong emphasis on brownfield in-corridor expansions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the supportive regulatory environment across North America, which is expected to enhance project delivery timelines [6] - The company anticipates continued strong performance with year-over-year growth of 6%-8% expected in 2026 [32] - The outlook for natural gas and power demand is trending higher, with significant opportunities in the energy market [10][11] Other Important Information - The company sanctioned $5.1 billion in new projects over the last 12 months, capitalizing on the demand for power generation and data centers [5] - The company has developed enhancements that have improved capital allocation and project development rigor, increasing capital efficiency and cost management [20] - The company is leveraging AI and advanced algorithms to optimize pipeline configurations and improve operational performance [17][18] Q&A Session Summary Question: Long-term EBITDA growth trajectory - Management indicated that if current return levels remain true, mid-single-digit CAGR guidance could be sustained beyond 2028 [40][41] Question: Potential for increased CapEx - Management stated that while the current CapEx is set at $6 billion, there is potential to consider increasing it based on project backlog and execution capabilities [42][43] Question: Size and complexity of projects - Management noted that projects are becoming larger but remain straightforward in execution, with average project sizes around $500 million [46][48] Question: Project backlog and capital constraints - Management confirmed that no projects have been turned down due to capital constraints, and there is room to expand the backlog [50][51] Question: Strategic decision to focus on transmission - Management explained that the focus on transmission rather than competing in power generation is driven by strong utility relationships and low-risk returns [52] Question: Status of Bruce C project - Management provided an update on the Bruce C project, indicating progress towards FID with ongoing assessments and funding considerations [54] Question: Rate cases and potential toll increases - Management confirmed that several rate cases are in process, with conservative estimates included in budgeting and forecasting [57] Question: Challenges with contractors and market pressures - Management acknowledged that while market pressures have not materially impacted operations, they are monitoring suppliers and contractors closely [58][60]

Financial Performance & Outlook - The company delivered approximately 8% comparable EBITDA growth year-over-year for the first 9 months of 2025[15] - The company is on track to deliver a long-term target of 475x debt-to-EBITDA[15] - The company expects to deliver 2026E comparable EBITDA of $116 - $118 billion[86] - The company is targeting $6 - $7 billion annual net capital expenditures through 2030 with build multiples in the 5 – 7x range[78, 86] - The company expects approximately 6% – 8% comparable EBITDA growth from 2025 to 2026 and extending growth outlook of approximately 5% – 7% 3-year CAGR[76] Growth Projects & Capital Allocation - The company placed approximately $8 billion of assets into service year-to-date, with 2025 projects tracking approximately 15% under budget[15, 60] - The company sanctioned approximately $51 billion of new projects in the last twelve months at an average build multiple of approximately 60x[15] - The company is announcing approximately $07 billion of new growth projects serving power generation & data center demand[15] - The company's natural gas demand growth is projected to increase by 45 Bcf/d by 2035[21] Strategic Priorities & Market Position - The company's total system deliveries averaged 230 Bcf/d, up 2% vs Q3 2024[74] - The company's deliveries to LNG facilities averaged 37 Bcf/d, up 15% vs Q3 2024[74]

Financial Performance - Revenues for the three months ended September 30, 2025, increased to CAD 3,704 million, up 10.3% from CAD 3,358 million in the same period of 2024[1] - Net income for the three months ended September 30, 2025, was CAD 764 million, a decrease of 53.8% compared to CAD 1,651 million in the same period of 2024[4] - For the three months ended September 30, 2025, net income attributable to controlling interests was CAD 637 million, a decrease of 57% compared to CAD 1,483 million in the same period of 2024[14] - Net income attributable to common shares for Q3 2025 was CAD 609 million, compared to CAD 1,457 million in Q3 2024, reflecting a decrease of 58%[41] - The company reported a net income from continuing operations of CAD 968 million for Q3 2025, down from CAD 1,483 million in Q3 2024, a decline of 34.5%[41] Operational Metrics - Cash generated from operations for the nine months ended September 30, 2025, was CAD 5,452 million, down 2.8% from CAD 5,612 million in the same period of 2024[8] - Operating expenses for the three months ended September 30, 2025, totaled CAD 2,121 million, an increase of 6.5% from CAD 1,991 million in the same period of 2024[1] - Operating costs for Q3 2025 were CAD 1,420 million, compared to CAD 1,363 million in Q3 2024, reflecting an increase of 4.2%[41] - The company recognized a net cash provided by operations of CAD 12 million for the three months ended September 30, 2025, a significant decrease from CAD 534 million in 2024[33] Assets and Liabilities - Total assets as of September 30, 2025, were CAD 120,234 million, an increase from CAD 118,243 million as of December 31, 2024[11] - Long-term debt as of September 30, 2025, was CAD 44,364 million, a slight decrease from CAD 44,976 million as of December 31, 2024[11] - The accumulated deficit at the end of the period increased to CAD (6,026) million from CAD (2,378) million year-over-year[14] - Total equity decreased to CAD 37,576 million as of September 30, 2025, down from CAD 40,477 million in 2024[14] Dividends - The company declared dividends on common shares amounting to CAD 885 million for the three months ended September 30, 2025, compared to CAD 996 million in the same period of 2024[8] - TC Energy declared a quarterly dividend of CAD 0.85 per common share for Q3 2025, down from CAD 0.96 in Q3 2024, and CAD 2.55 for the nine months ended September 30, 2025, compared to CAD 2.88 in the same period last year[9] Discontinued Operations - The company reported a net loss from discontinued operations of CAD 204 million for the three months ended September 30, 2025, compared to a net income of CAD 119 million in the same period of 2024[1] - Revenues from discontinued operations were CAD 0 for the three months ended September 30, 2025, compared to CAD 725 million in the same period of 2024[31] - The spinoff of the Liquids Pipelines business resulted in a net loss from discontinued operations of CAD (204) million for the three months ended September 30, 2025[35] Capital Expenditures - Capital expenditures for Q3 2025 totaled CAD 1,255 million, up from CAD 1,673 million in Q3 2024, indicating a decrease of 25%[41] - Capital projects in development for Q3 2025 included CAD 2 million, compared to CAD 8 million in Q3 2024, indicating a decrease of 75%[41] - Capitalized interest for the nine months ended September 30, 2025, was CAD 7 million, significantly lower than CAD 200 million in 2024[70] Tax and Regulatory Matters - The effective income tax rate increased to 22% for the nine months ended September 30, 2025, compared to 16% in 2024, primarily due to foreign exchange exposure and higher flow-through income taxes[65] - The company is currently assessing the impact of new accounting standards effective January 1, 2025, which will enhance income tax disclosures[26] Other Comprehensive Income - The company reported other comprehensive income of CAD 424 million for Q3 2025, a significant recovery from a loss of CAD 273 million in Q3 2024[78][79] - For the nine months ended September 30, 2025, TC Energy recorded a total other comprehensive loss of CAD 682 million, compared to a gain of CAD 502 million in the same period of 2024[81] Credit Risk and Derivatives - TC Energy's exposure to counterparty credit risk includes cash and cash equivalents, accounts receivable, and derivative assets, with a focus on monitoring creditworthy entities[89][90] - The company reported no significant credit losses or concentrations of credit risk as of September 30, 2025[94] - The fair value of derivative instrument assets at September 30, 2025, was CAD 516 million, with liabilities totaling CAD (529) million, resulting in a net liability of CAD (13) million[127] Strategic Initiatives - The Southeast Gateway pipeline was completed in Q2 2025, contributing to the company's strategic initiatives in the energy sector[92] - The strategic alliance with CFE resulted in a cash and non-cash consideration of CAD 561 million (USD 411 million) for a 13.01% equity interest in TGNH[140]

Canadian pipeline operator TC Energy missed estimates for third-quarter profit on Thursday, hurt by weakness in its U.S. operations and in the power and energy solutions business. ...

Core Insights - Canadian business jet maker Bombardier reported an 11% increase in third-quarter revenue, driven by higher demand in its aftermarket services and the delivery of four additional planes [1] Revenue Performance - The company experienced an 11% rise in revenue for the third quarter, indicating strong performance in its aftermarket services business [1] - The increase in revenue was also supported by the delivery of four more planes during the quarter [1]

Core Viewpoint - TC Energy Corporation has extended its financial outlook through 2028, projecting a 5% to 7% annual growth in comparable EBITDA, supported by strong North American energy fundamentals and a robust project pipeline [1][13]. Financial Highlights - Comparable earnings for Q3 2025 were $0.8 billion or $0.77 per share, down from $0.9 billion or $0.86 per share in Q3 2024 [4][7]. - Net income attributable to common shares was $0.8 billion or $0.78 per share, compared to $1.3 billion or $1.29 per share in Q3 2024 [4][5]. - Comparable EBITDA for Q3 2025 was $2.7 billion, an increase from $2.4 billion in Q3 2024 [4][5]. - The 2025 outlook for comparable EBITDA is projected to be between $10.8 billion and $11.0 billion [4][13]. - A quarterly dividend of $0.85 per common share has been declared for the quarter ending December 31, 2025 [14]. Operational Highlights - Year-to-date, TC Energy has placed approximately $8 billion of assets into service on time and under budget [11]. - Canadian Natural Gas Pipelines deliveries averaged 23.0 Bcf/d, a 2% increase compared to Q3 2024 [4]. - U.S. Natural Gas Pipelines daily average flows were 26.3 Bcf/d, consistent with Q3 2024 [4]. - Deliveries to LNG facilities averaged 3.7 Bcf/d, a 15% increase compared to Q3 2024, setting a new daily record of 4.0 Bcf on August 7, 2025 [4]. Project Highlights - Over the past 12 months, TC Energy has sanctioned over $5 billion in new growth projects, including $0.7 billion in the third quarter [1][12]. - The projects are expected to deliver a weighted average build-multiple of approximately 5.9 times and are backed by 20-year take-or-pay or cost-of-service contracts [1][12]. - Significant projects include the TCO Connector and Midwest Connector, designed to provide approximately 0.6 Bcf/d of capacity for new natural gas-fired power generation [11][12]. Strategic Outlook - The company expects 2026 comparable EBITDA to be between $11.6 billion and $11.8 billion, reflecting a 6% to 8% year-over-year growth [4][13]. - The 2025 to 2028 outlook includes an expected comparable EBITDA range of $12.6 billion to $13.1 billion, indicating a compounded annual growth rate of 5% to 7% [13]. - TC Energy's strategy focuses on executing a selective portfolio of growth projects while maintaining financial strength and maximizing asset value [13].