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Engineering firm Genivar Inc. missed expectations Wednesday as its earnings decreased owing largely to fewer days of operation in the fourth quarter and because of future tax liabilities.

The Montreal-based company reported profit of $2.9-million or 16 cents a unit for the period ended Dec. 31, compared with $8.2-million or 47 cents a year earlier.

Revenue was $154-million, versus $135-million in the fourth quarter of 2009.

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Genivar recorded a future income tax liability of $5.8-million owing to income trust taxation rules. It converted from an income fund to a corporation at the beginning of 2011.

It also recorded a $1.3-million decrease in earnings before interest, taxes, depreciation and amortization because of five fewer working days in the quarter, the slowdown of international operations and foreign exchange losses.

"In line with our accomplishments since the beginning of the year, our fourth-quarter performance was good as we achieved continued growth in revenues despite headwinds in our international operations," Pierre Shoiry, president and chief executive officer of Genivar, said in a statement.

Excluding future tax liabilities, Genivar earned 48 cents a unit, up from 47 cents a year ago but less than the 57 cents forecast by analysts.

"While we are surprised by the size of the shortfall in the company's results this quarter, we would argue that they represent a hiccup in an otherwise upward trend," wrote Pierre Lacroix of Desjardins Securities.

Organic growth in the quarter fell by 4.5 per cent. Genivar said it would have been 4.9 per cent if the number of working days in the quarter were the same as in 2009.

Genivar's backlog hit a record high of $420-million, up 4.5 per cent from the previous quarter.

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For the full year, its profit fell to $30.8-million, or $1.70 a unit, from $31.1-million, or $2.06, in 2009. Revenue increased 21.4 per cent to $580.4-million from $477.9-million a year earlier.

Ben Vendittelli of Laurentian Bank Securities said the weak results were unusual and not an indication of a trend.

"We continue to believe Genivar is one of the best-positioned plays in the sector from a business mix standpoint and that its relatively healthy balance sheet should allow it to pursue its acquisition strategy unabated," Mr. Vendittelli wrote in a report.

The analyst added that Genivar is well positioned to benefit from infrastructure spending in Canada in 2011, since about two-thirds of its revenue stems from various levels of government.

Maxim Sytchev of NCP Northland Capital Partners said it expects Genivar will pursue large acquisitions in 2011 after adding three companies in the fourth quarter and 650 employees in 2010.

Genivar said it plans to expand its work force to 7,000 employees from 4,500 by the end of 2014.

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"Genivar is still in its early stages of development with ample opportunities for growth in the North American engineering consulting market," he wrote in a report.

The company's market share is just 0.6 per cent but it has one of the industry's highest dividends.

During the quarter, the company also acquired three firms based in Ontario, Alberta and British Columbia.

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