TransCanada (TSX: TRP, NYSE: TRP) is the first of the Canadian pipeline behemoths to report earnings. It did so this morning and posted mixed results. Earnings were up year-over-year, but missed analyst expectations on earnings per share and revenue.

General rundown
Revenue came in at $2.0 billion, up from the $1.85 billion it posted a year ago, but short of the $2.14 billion analysts were expecting. Earnings per share came in at $0.51 per share, again up from $0.43 per share last year, but just shy of the $0.52 that analysts were expecting.

Naturally, there is much more to an earnings release than whether or not analysts were disappointed, but it often explains how the market reacts and is worth noting. Now, let’s take a closer look at what went down at TransCanada in the second quarter.

Q2: Digging deeper
Two out of TransCanada’s three business segments posted year over year improvements. Here is how the EBITDA picture looked this past quarter, unit by unit:

Source: TransCanada. Dollar figures in millions

Clearly, the big story here is the company’s energy unit. TransCanada’s Western Power segment benefitted from higher realized power prices and higher volumes of power purchase agreements, due to fewer outage days. Western Power EBITDA was $123 million, compared to $27 million last year, though 2012’s number was impacted by a one-time charge.

On top of that, for the first time in 20 years, the Bruce Power nuclear facility is operating all eight units. The facility has a capacity of 6,200 megawatts  and provides more than 32% of Ontario’s power. TransCanada’s stake in the project resulted in $59 million in EBITDA this quarter, compared to $31 million a year ago.

TransCanada’s natural gas unit dropped slightly year-over-year, but the company is finally posting an uptick in EBITDA for its Mainline pipeline, arguably TransCanada’s most important asset. The National Energy Board increased the Mainline’s approved return on equity from 8.08% last year to 11.50% this year, resulting in a $16 million increase in second quarter EBITDA. That improvement was offset by poor performance delivered by the company’s natural gas pipelines in the U.S. and Mexico. EBITDA there dropped $48 million, year over year.

The oil pipelines unit performed more or less the same year over year. The two important stories that should drive growth in this segment – the Keystone XL project and the Mainline conversion – are still developing.

The Keystone XL debacle is well-documented. There are no real updates to that story, other than the company expects to have the system completely up and running two years after the Presidential Permit is received from the U.S. government. Whenever that might be.

The Mainline conversion project, dubbed the Energy East Pipeline, is through the open season stage and into a review of those results. Ideally, the company will have commitments from shippers to send 850,000 barrels per day of crude oil from western Canada to markets in eastern Canada.