February 5, 2009 / 1:12 PM / 9 years ago

UPDATE 1-Heroux-Devtek results slip on higher tax rate

- Earnings per share of C$0.16 in Q3 versus C$0.17

- Sales up 12.2 percent to C$85.6 million

- Sees internal sales growth near 10 pct for fiscal year

TORONTO, Feb 5 (Reuters) - Heroux-Devtek Inc HRX.TO reported a lower quarterly profit, but higher revenue and operating income, as results were impacted by a higher tax rate in the third quarter versus a year ago, the company said.

The Longueuil, Quebec-based aerospace and industrial manufacturer said it earned C$5.2 million ($4.2 million), or 16 Canadian cents a diluted share, in the second quarter, down from C$5.3 million, or 17 Canadian cents diluted a share, in the year-earlier period.

Sales for the period, ended Dec. 31, grew by 12.2 percent to C$85.6 million, from C$76.3 million for the same period last year.

Analysts had been expecting, on average, 15 Canadian cents a share on revenue of C$85.1 million, according to data compiled by Reuters Estimates.

The company said the lower earnings reflect an effective tax rate of 23.2 percent in the third quarter of the current fiscal year, versus a tax rate of 0.4 percent a year ago due to the utilization of tax losses carried forward.

Operating income was up 19.4 percent, to C$7.8 million from C$6.6 million.

Aerospace sales were up 6.8 percent, while industrial sales climbed 47 percent, driven by increased sales to the wind energy and heavy industry markets.

“In spite of the uncertain environment, our backlog remains solid and we continue to anticipate an internal sales growth of close to 10 percent for the current fiscal year ending March 31, 2009,” said Heroux-Devtek President and chief executive, Gilles Labbe.

As at Dec.31, 2008, Heroux-Devtek said its balance sheet remained strong with cash and cash equivalents of C$31.7 million and long-term debt of C$81.4 million. ($1=$1.23 Canadian) (Reporting by John McCrank, editing by Dave Zimmerman)

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