Topic: How To Invest

The Successful Investor Hotline – Friday, February 1, 2019

Article Excerpt

SNC-LAVALIN GROUP INC., $36.36, Toronto symbol SNC, is a leading Canadian engineering and construction company that specializes in large-scale infrastructure projects such as roads, bridges, transit systems and water-treatment plants. The stock fell over 25% this week after the company cut its 2018 earnings forecast (before unusual items) to between $2.15 and $2.30 a share. It previously expected to earn $3.60 to $3.85 a share. SNC’s lower earnings are mainly due to unexpected costs related to a contract for its mining business. The company is now trying to recover those costs from the client. The diplomatic dispute between Canada and Saudi Arabia has also hurt SNC’s ability to win new oil and gas infrastructure contracts in that country. In 2017, Saudi Arabia supplied 11% of SNC’s total revenue. The company now plans to write down the value of its Saudi operations by $1.24 billion, or $7.06 a share. It is also considering selling or spinning off its Saudi business. OUR RECOMMENDATION: SNC-Lavalin is still a..