UPDATE 1-SNC-Lavalin earnings miss estimates on infrastructure projects

Thu Aug 6, 2015 9:00am EDT
 
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(Recasts with analyst expectations, details on infrastructure segment.)

Aug 6 (Reuters) - SNC-Lavalin Group Inc reported second-quarter earnings that fell short of analysts' expectations on Thursday after running into costly problems on two infrastructure projects.

The engineering and construction company said its infrastructure segment had a challenging quarter, mainly because of difficult soil conditions along a transit tunnel and costs associated with a major Canadian highway project. It did not name either project.

"Despite some challenges in the second quarter in our infrastructure segment, we believe that historical volatility in the backlog will dissipate. We are maintaining our current outlook for 2015, and believe the company is well positioned to deliver a strong second half," said Chief Executive Officer Robert Card.

The Montreal-based company expects earnings per share between C$1.80 and C$2.10 for the full year.

Adjusted earnings were little changed for the second quarter, even as revenue jumped, boosted by last year's acquisition of engineering group Kentz Corp.

Excluding an amortization charge related to the Kentz acquisition and other unusual items, earnings were C$53.2 million, or 34 Canadian cents a share, compared with C$52.0 million, or 34 Canadian cents.

Analysts expected earnings of 48 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Net income fell to C$26.5 million ($20.13 million), or 17 Canadian cents a share, from C$32.1 million, or 21 Canadian cents, a year earlier. Revenue rose to C$2.25 billion from C$1.70 billion. ($1 = $1.32 Canadian) (Reporting by Allison Martell in Toronto; Editing by Chizu Nomiyama and Jeffrey Benkoe)