Pierre Duhaime, president and CEO of SNC-LavalinPaul Chiasson
SNC-Lavalin saw third-quarter revenue slide from year-ago levels but the firm posted an increase in year-over-year profit due to an expected boost in gross margins for its fixed-price contracts.
The Montreal-based engineering and construction company reported net income of $103.1-million or 68 cents per share for the quarter ended Sept. 30 - up from a year-earlier profit of $91.3-million or 60 cents per share.
Quarterly revenue totalled $1.4-billion, slipping from $1.7-billion last year.
SNC beat analyst expectations for earnings per share, but fell short of revenue predictions for the quarter, according to figures compiled by Thomson Reuters.
Analysts had predicted earnings per share of 57 cents and pegged revenue at $1.6-billion, Thomson Reuters said.
SNC-Lavalin said the increase in profit for the quarter was largely due to an increase in margin from Packages, which refers primarily to fixed-price contracts involving one or more of its services, despite lower revenue from that activity.
Packages accounted for $472.5-million in revenue during the quarter, down from $791.4-million a year earlier. Services revenue fell less precipitously to $535.6-million from $548.7-million, operations and maintenance revenue increased to $311.9-million from $249.6-million and infrastructure investments brought in $102.3-million, up from $95.6-million in the third quarter of 2008.
The company said total backlog for its four revenue categories remained solid at $10.2-billion at the end of the quarter, compared to $9.7-billion last year.
"We achieved good results in the third quarter, our net income is up and our cash position has increased. Our backlog remains solid and our list of prospects both national and international is promising, which bodes well for 2010," said Pierre Duhaime, the company's president and chief executive officer.
Mr. Duhaime added that the company was expecting its year-to-date net income to see growth of seven to 12 per cent for 2009.
SNC-Lavalin shares closed at $45.29 Thursday on the Toronto Stock Exchange.