snc lavalin

SNC-LAVALIN GROUP INC. $40 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.6 million; Market cap: $6.0 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.5%; TSINetwork Rating: Average; www.snclavalin.com) earned $26.5 million in the second quarter of 2015, down 17.3% from $32.1 million a year earlier. Earnings per share declined 19.0%, to $0.17 from $0.21, on fewer shares outstanding.

The drop was largely because SNC ran into unstable soil while building a mass-transit project, which increased its costs. Expenses at a separate highway project were also higher than expected, further hurting its earnings.

However, revenue jumped 32.7%, to $2.25 billion from $1.7 billion, thanks to U.K.-based Kentz, which SNC bought in August 2014. Kentz provides engineering and construction services to the oil and gas industry and now supplies a third of SNC’s revenue.

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SNC-LAVALIN GROUP INC. $40 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.6 million; Market cap: $6.0 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.5%; TSINetwork Rating: Average; www.snclavalin.com) earned $26.5 million in the second quarter of 2015, down 17.3% from $32.1 million a year earlier. Earnings per share declined 19.0%, to $0.17 from $0.21, on fewer shares outstanding. The drop was largely because SNC ran into unstable soil while building a mass-transit project, which increased its costs. Expenses at a separate highway project were also higher than expected, further hurting its earnings. However, revenue jumped 32.7%, to $2.25 billion from $1.7 billion, thanks to U.K.-based Kentz, which SNC bought in August 2014. Kentz provides engineering and construction services to the oil and gas industry and now supplies a third of SNC’s revenue....

BANK OF NOVA SCOTIA, $64.37, Toronto symbol BNS, is paying an undisclosed sum to Citigroup (New York symbol C) for its retail-banking operations in Panama and Costa Rica, including 27 branches. The bank expects to close the deal in the next few months. The move will nearly triple its customer base in these two countries, from 137,000 to 387,000. It will also make Bank of Nova Scotia the second-largest credit card provider in both nations, with 18% of the market in Panama and 15% in Costa Rica. The bank entered Panama in 1974 and Costa Rica in 1995. This long history cuts the risk of expanding in these countries....

SNC-LAVALIN GROUP INC. $46 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.1 million; Market cap: $7.0 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) fell to $36.24 in March 2015 after the RCMP charged the company and two subsidiaries for using bribes to win construction deals in Libya between 2001 and 2011.

These are the same allegations that prompted SNC to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. The company plans to fight these charges.

Meantime, SNC has continued to win public works contracts, including one for building a new bridge in Montreal and another for a transit line in Toronto. That’s why the stock has recovered to its current level.

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These four companies provide hard-to-replace services to oil and gas producers. That gives them a big advantage, particularly as oil prices have started to recover. Crude’s recent gains should also spur their earnings and give them more room for dividend hikes. SNC-LAVALIN GROUP INC. $46 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.1 million; Market cap: $7.0 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) fell to $36.24 in March 2015 after the RCMP charged the company and two subsidiaries for using bribes to win construction deals in Libya between 2001 and 2011. These are the same allegations that prompted SNC to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. The company plans to fight these charges....

SNC-LAVALIN GROUP INC., $46.40, Toronto symbol SNC, gained 3% this week on speculation that larger engineering firms in Spain and Australia are interested in buying the company. The stock fell to $36.24 in March 2015 after the RCMP laid charges against SNC and two of its subsidiaries for using bribes to win construction contracts in Libya between 2001 and 2011. These are the same allegations that prompted the company to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. SNC plans to fight these charges....

Bird Construction Inc., $10.81, symbol BDT on Toronto (Shares outstanding: 42.5 million; Market cap: $459.4 million; www.bird.ca), focuses on projects in a number of markets, including industrial, commercial, institutional, civil construction and mining. The company began operating 95 years ago in Medicine Hat, Alberta. Today, it has offices in Toronto, Winnipeg, Calgary, Edmonton, Vancouver and Seattle. Bird’s industrial projects (which supplied 57% of its 2014 revenue) include work in the petrochemical, oil sands, mining, refinery and water- and wastewater-treatment sectors....

TRANSCANADA CORP., $56.42, Toronto symbol TRP, has announced a new deal with Magellan Midstream Partners (New York symbol MMP). The two firms have formed a 50/50 partnership to build a pipeline connecting their oil-storage facilities in Houston, Texas. This will give TransCanada’s oil-shipping clients access to more refineries in the Houston area. The company’s share of the $50-million cost is $25 million. To put that in context, TransCanada earned $511 million, or $0.72 a share, in the three months ended December 31, 2014. The partners expect to complete this project in mid-2016....

CAE INC., $14.74, Toronto symbol CAE, announced this week that it has sold five flight simulators to airlines in the U.S. and Asia. It will also build a new facility in Bogota, Colombia, to train pilots for the Viva Colombia airline under a long-term agreement. With these deals, CAE sold 41 simulators in its 2015 fiscal year, which ended March 31, 2015. It sold a record 48 simulators in fiscal 2014. The company has also won several contracts to upgrade flight simulators and train aircrews for the U.S., U.K., Australian and Italian air forces. CAE’s military businesses supply 40% of its revenue, which cuts its reliance on cyclical commercial airlines....

SNC-LAVALIN GROUP INC. $38 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.5 million; Market cap: $5.8 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.6%; TSINetwork Rating: Average; www.snclavalin.com) earned $106.7 million in the fourth quarter of 2014, up 0.6% from $106.1 million a year earlier. Earnings per share were unchanged at $0.70. These figures exclude a gain on the sale of AltaLink, which operates power lines in Alberta.

Revenue jumped 32.7%, to $2.8 billion from $2.1 billion, due to the recent acquisition of U.K.-based Kentz, which provides engineering and construction services to the oil and gas industry.

The stock has suffered lately, mainly due to formal charges against the company for using bribes to win construction contracts in Libya between 2001 and 2011. These are the same allegations that prompted SNC to replace its senior executives in 2012 and bring in a new program to enforce ethical practices.

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