Specialty industrial services provider,
), recently lowered its earnings guidance for fourth quarter
fiscal 2013 ending May 31. Considering the opening stock price on
May 20, the day on which the company revised its earnings
estimate downwards, shares have fallen around 12.5% to a closing
price of $35.00 on May 21.
Apart from providing industrial services, Team Inc. also inspects
and assesses piping systems and vessels used in refining,
petrochemical, power, pipeline and other heavy industries.
Outlook for Fourth Quarter Fiscal 2013
Team Inc. presently expects fourth quarter earnings between 52
cents and 60 cents per share, down from its earlier guidance of
69 cents to 84 cents. Management believes that lower profit
margins would adversely hit the company's previous earnings
guidance. It currently expects gross margins to be 200 bps lower
than its previous guidance. Management also expects to report
slower growth in revenues due to fewer big turnaround projects.
In addition, management believes that the company would be
adversely hit during the quarter due to cost and utilization
challenges. It further stated that its results would be poorly
affected due to considerable growth in resources, thereby causing
an imbalance between cost and utilization level.
Outlook for Fiscal 2014
The company currently expects its fiscal 2014 revenues to be
around $790 million with earnings of about $2.00 per share.
Management also expects to derive significant advantages from
business expansion, thereby delivering organic growth of 10%.
Moreover, management is confident that it will be able to strike
a balance between its various resources and restore its current
operating and utilization rate to historical rates in the next
Team Inc. currently carries a Zacks Rank #4 (Sell). Some other
stocks within the sector worth mentioning are
AMN Healthcare Services Inc.
CTPartners Executive Search Inc.
), each carrying a Zacks Rank #2 (Buy).
AMN HLTHCR SVCS (AHS): Free Stock Analysis
CARDTRONICS INC (CATM): Free Stock Analysis
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TEAM INC (TISI): Free Stock Analysis Report
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