November 9, 2010 / 7:43 PM / in 7 years

Bird Construction units slump on Q3 results

Nov 9 (Reuters) - Units of Bird Construction Income Fund BDT_u.TO lost nearly a fourth of its value on Tuesday, a day after the company’s third-quarter profit trailed estimates.

The company blamed projects that yielded lower margins due to competitive construction environment for the weak results.

“The margin profile of backlog is lower than previously anticipated,” Canaccord Genuity, which cut its rating to “hold” from “buy,” said in a note to clients.

The company reported net income of C$8.5 million, 61 Canadian cents a share, lower than C$1.03 a share that analysts were expecting, according to Thomson Reuters I/B/E/S.

Canaccord Genuity also cut its price target by C$11 to C$32.

However, the brokerage said the fund has a strong management team, solid balance sheet and a stable $C1.80 per unit distribution, and was worth buying following the price dip following the quarterly results.

By 2012, most of the low margin contracts should be over and Canaccord anticipate a greater contribution from the high-margin industrial sector for the fund.

Units of the company were trading down C$4.84, or 13 percent at C$33.10 Tuesday on the Toronto Stock Exchange.It touched a low of C$28.97 earlier. (Reporting by Aftab Ahmed in Bangalore; Editing by Prem Udayabhanu) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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