November 4, 2010 / 6:28 PM / 8 years ago

UPDATE 1-Stantec posts "solid" quarter, tempers outlook

* Q3 adj EPS C$0.57 vs expectation C$0.55

* Full-year revenue now seen “stable” with 2009

* Stock down 1.4 pct at C$27.50 on TSX

OTTAWA, Nov 4 (Reuters) - Canadian engineering firm Stantec Inc (STN.TO) (STN.N) reported a slightly higher-than-expected quarterly profit on Thursday, but tempered the wording of its full-year revenue-growth forecast to “stable” from its previous “stable to modest”.

Stantec said the change reflects a slower U.S. recovery and a stronger Canadian dollar. Analysts were not overly concerned by the change and the stock fell 1.4 percent.

Dundee Capital Markets analyst Carolyn Dennis said the adjusted forecast offsets largely solid quarterly results.

“That being said, we were not expecting significant organic growth in 2011 and we continue to believe Stantec is in an excellent position to capitalize on acquisition activities to fuel growth in 2011,” she wrote in a note.

The Edmonton-based company made six acquisitions in the third quarter, buying companies in North America and England. Combined, the deals added close to 760 staff to Stantec, which has about 10,000 employees.

Stantec said third-quarter net income was C$32.1 million ($32.1 million), or 70 Canadian cents a share, versus a year-earlier loss of C$9.9 million, or 22 Canadian cents a share.

Stripping out a C$5.9 million gain from the sale of an equity investment, Stantec said it earned C$26.2 million, or 57 Canadian cents a share. That compares with year-earlier earnings, adjusted to exclude a C$35 million impairment charge, of C$25 million, or 55 Canadian cents per share.

Analysts, on average, had expected a profit of 55 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 4.2 percent to C$386.7 million.

More-closely watched “net revenue”, which excludes sub-consultant and other direct expenses, was 3.5 percent higher at C$314.5 million.

Stantec shares dropped 40 Canadian cents to C$27.50 on the Toronto Stock Exchange on Thursday afternoon. The stock has lost about 4 percent of its value so far this year.

$1=$1.00 Canadian Reporting by Susan Taylor; editing by Peter Galloway

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