December 10, 2010 / 1:47 PM / in 7 years

UPDATE 2-Garda World sees FY oper profit at lower end of view

* Sees FY oper profit at lower end of C$134-C$137 mln

* Cites contract transition delays

* Q3 EPS C$0.20 vs C$0.04 year ago

* Cash logistics segment looks positive

* Shares fall as much as 4 pct (Recasts; adds outlook, CEO, analyst comments, updates shares)

By Amruta Sabnis

BANGALORE, Dec 10 (Reuters) - Canada’s Garda World Security Corp GW.TO said its full-year operating profit would at best meet the lower end of its prior view as transition of clients from competitors is taking longer, sending its shares down as much as 4 percent.

The company, which provides armored cars, cash-handling services and automated teller machine maintenance, has been looking to win additional business from several U.S.-based financial institutions. [ID:nSGE6811BA]

“The delay on starting the contracts, the large bank contracts, is playing against us,” Chief Executive Stephan Cretier said on a conference call.

The company now expects full-year operating profit be closer to the lower end of its view of C$134-C$137 million.

“I would say it’s clear we’re not going to be at C$137 million,” Cretier said.

He said that the delays were mostly due to the caution on ‘transitioning’ clients from competitors.

Garda’s rivals include Brink’s Co BCO.N and Sweden’s Loomis AB LOOMb.ST.

However, Garda expects strong organic growth over the next year in its cash logistics segment, which accounts for half of its total revenue.

New Contracts in the segment with financial institutions entered earlier in the year coupled with lower costs helped Garda post a five-fold jump in third-quarter profit.

In the third quarter, the cash logistics segment witnessed organic growth for the first time in more than a year, Martin Landry of Desjardins Securities said in a note.

For the August-October quarter, Garda’s net income rose to C$6.3 million, or 20 Canadian cents a share, from C$1.4 million, or 4 Canadian cents a share, a year ago.

Analysts were expecting earnings of 22 Canadian cents a share, on revenue of C$295.3 million, according to Thomson Reuters I/B/E/S.

Montreal-based Garda’s shares, which have risen 11 percent since it reported second-quarter results, were trading down 1.3 percent at C$9.62 on the Toronto Stock Exchange. They earlier touched a low of C$9.40. ($1=1.009 Canadian Dollar) (Reporting by Amruta Sabnis in Bangalore; Editing by Vyas Mohan)

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