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Topic: How To Invest

Investing in stocks: Severe weather weighs on Churchill’s earnings

The Churchill Corp., symbol CUQ on Toronto, sells construction, general-contracting, maintenance, insulation, fireproofing, electrical and power-line construction services. Its clients are in the resource, industrial, utility and power-generation industries. Churchill has customers throughout western Canada.

We analyze Churchill in Stock Pickers Digest, our newsletter for investing in stocks that are more aggressive.

In the three months ended March 31, 2011, Churchill’s revenue rose 67.0%, to $304.7 million from $182.5 million a year earlier. The rise was mainly due to Seacliff Construction, which Churchill bought for $380 million in May 2010. Seacliff sells general contracting, electrical-contracting and earth-moving services. Like Churchill, Seacliff mostly operates in western Canada.

Earnings fell 28.4% in the quarter, to $5.8 million from $8.1 million. Earnings per share fell 47.8%, to $0.24 from $0.46, on more shares outstanding. The decline was mostly due to severe winter weather, which lowered construction activity.

Churchill recently bought McCaine Electric Ltd., a privately held Winnipeg, Manitoba-based electrical and data-communications contracting company, for $9 million in cash and $2.5 million in common shares. Subject to McCaine’s earnings in 2012 and 2013, Churchill may pay another $1 million in cash.

If you’re interested in investing in stocks in the more aggressive segment of the Canadian and U.S. markets, you should have a subscription to Stock Pickers Digest. Best of all, you can get the latest issue absolutely free. Click here to learn how.

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