Cost cutting sets them up for gains

Article Excerpt

WAJAX CORP. $24.63 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding: 20.0 million; Market cap: $493.3 million; Dividend yield: 4.1%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts and systems such as ball bearings, hoses, diesel engines and transmissions. Wajax’s customers are spread across the resources, construction, manufacturing and transportation industries. In the three months ended December 31, 2017, the company’s revenue jumped 20.0%, to $376.6 million from $313.7 million a year earlier. If you disregard an extra $10 million in mining orders during the year-earlier quarter, revenue gained 24%. Wajax made $10.9 million in the latest quarter, or $0.54 a share. That’s up 22.5% from $8.9 million, or $0.44. Big annual savings spur earnings In addition to the higher revenue, the company’s ongoing restructuring efforts are responsible for the profit gain. That plan aims to reduce Wajax’s workforce by 10%. The company expects annual savings of about $17 million. The restructuring should also result in earnings of $1.95…