February 15, 2011 / 11:28 AM / 7 years ago

UPDATE 2- Canam Group's Q4 profit lags Street on higher costs

* Q4 EPS C$0.02 vs est C$0.06

* Q4 rev C$248.4 mln vs est C$254 mln

* Gross margin falls to 10.6 pct (Recasts; adds details)

Feb 15 (Reuters) - Canadian construction equipment maker Canam Group Inc posted quarterly results below estimates, hurt by higher cost of sales and a weak non-residential construction market.

Non-residential construction -- which includes office buildings and commercial space like shopping and distribution centers, as well as factories -- has been hampered by tight credit and a wobbly U.S. economy. High unemployment has depressed demand for new office towers and shops.

Canam, which designs and manufactures welded beams, joists and girders, posted a net profit of C$755,000 ($763,500), or 2 Canadian cents a share for the October-December quarter, compared with C$5.1 million, or 11 Canadian cents a share, last year.

Analysts on average were expecting the company to earn 6 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose two-thirds to C$248.4 million, but was still short of analysts’ consensus of C$254 million.

The company’s gross margin contracted by more than 8 percent to 10.6 percent as the downturn in non-residential construction market continued.

Cost of sales rose more than 80 percent to C$222.2 million.

Shares of the Quebec-based company closed at C$7.64 on Monday on the Toronto Stock Exchange. They touched a high of 9.81 last April. ($1=.9888 Canadian Dollar) (Reporting by Aftab Ahmed in Bangalore; Editing by Jarshad Kakkrakandy)

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