SNC-Lavalin Group Inc. reported first-quarter profit rose 10 percent, beating analysts’ estimates, boosted by the oil and gas unit and cost cuts.
Net income rose to C$104.4 million ($86.5 million), or 68 cents a share. Analysts had projected earnings of 36 cents a share on average. Revenue rose 31 percent to C$2.26 billion, lagging the C$2.51 billion average forecast.
“Decent operational quarter,” Maxim Sytchev, an analyst at Dundee Securities in Toronto, said in a note to clients. “What’s not to like?”
SNC recently won two contracts with a “major” oil company in the Middle East and was chosen as part of a group that will build a new bridge across the St. Lawrence river, according to the earnings statement Thursday. The company also hired financial advisers for its planned sale of a stake in 407 International Inc., the operator of a toll road in the Toronto area.
Having warned of “challenging” market conditions in March, Chief Executive Officer Robert Card is overseeing efforts to eliminate about 9 percent of SNC-Lavalin’s workforce by 2016. Card is also integrating last year’s C$2.1 billion acquisition of Kentz Corp., a bid to expand into oil and gas services that occurred just as crude prices were crumbling.
SNC rose 5.5 percent to C$45.33 at the close in Toronto. The stock had slid 3 percent this year through Wednesday. That compares with a 2.7 percent advance by Canada’s benchmark Standard & Poor’s/TSX Composite Index.