) lowered its first quarter 2013 earnings per share guidance to
the range of 4 cents to 8 cents, citing project delays due to
adverse weather conditions as well as postponement of several
contracts. The news led to a $1.55 or 6% drop in Aegion
Aegion, however, confirmed that its prior full-year 2013 guidance
range of $1.60 to $1.80 per share remains intact. Cash flow from
operating activities is expected to be over $100 million, and
return on invested capital is projected to be in range of 9% to
Aegion had reported earnings per share of 18 cents in the first
quarter of 2012. Compared to this, the earnings guidance for the
first quarter of 2013 projects a decline of 56% to 78%.
During the quarter, adverse weather affected parts of Canada as
well as the Midwest and Eastern United States, which led to
delays for contracting and manufacturing activities associated
with the North America Water & Wastewater business and in
completing projects for the Commercial & Structural platform.
Furthermore, several domestic and international contracts for
Energy & Mining and Commercial and Structural, which were
slated to begin or completed by March end have been postponed.
An unexpected slowdown in the pace of pipeline construction by
the prime contractor for the Tite Liner project in Morocco during
the month of March was also a reason for the reduction in
earnings expectation for the quarter. In the Canadian Oil Sands,
soft ground conditions deferred overall pipeline construction
activity, impacting the schedule in the first quarter for Bayou's
pipe coating projects.
Normally, Aegion's first quarter ranks lowest in terms of
earnings with a meager contribution of 10% of total earnings for
the year, due to delays caused by weather and the seasonal low
period for many of its businesses. Given the favorable outlook of
its markets, Aegion expects to make up for this slow start to the
year during the balance of 2013 on the back of its strong backlog
at the start of 2013, a robust bid table supporting the
opportunity for securing additional projects this year.
Aegion Corporation provides proprietary technologies and services
to protect against the corrosion of industrial pipelines and for
the rehabilitation and strengthening of water, wastewater, energy
and mining piping systems and buildings, bridges, tunnels and
waterfront structures. Aegion currently holds a Zacks Rank #
3(Hold). Other stocks with a favorable Zacks Rank in the same
James Hardie Industries plc
Trex Co. Inc.
) with Zacks Rank #2 (Buy).
AEGION CORP (AEGN): Free Stock Analysis
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