Sign up USA
Proactive Investors - Run By Investors For Investors

Aveda Transportation records strong Q1 margins

Aveda Transportation records strong Q1 margins
Aveda Transportation and Energy Services Inc. (CVE:AVE) has reported unexpectedly strong quarterly earnings, with cost containment driving a strong improvement in margins, say analysts at brokerage and investment banking firm Stifel Nicolaus Canada Wednesday.

The Calgary-based oil transportation service provider, which has a buy recommendation and $3.50 price target from Stifel, returned earnings of 16 cents per share for the first quarter of 2013, well up on the Stifel estimate and consensus of 3 cents per share, according to the analyst research report released Wednesday.

Net income of $1.7 million was posted for the three months that ended March 31, compared to the $0.4 million recorded for the same period in 2012, an increase of $1.3 million or 291.6 per cent year-on-year and also up on the Stifel estimate of $0.3 million, a 479 per cent improvement on the forecast figure.

EBITDA was $4.2 million, which exceeded both Stifel Nicolaus’ estimate of $3.1 million by $1.1 million or 34 per cent and the consensus estimate of $3.2 million by $1 million or 30 per cent.

EBITDA margins were also up on the figures for the year before, with the 17.7 per cent recorded well up on the 12.4 per cent Aveda posted a year ago.

Revenue of $23.5 million, while representing an increase of $0.9 million or 2 per cent on the $22.6 million recorded in the same quarter a year ago, came in slightly under Stifel Nicolaus’ forecast figure for the quarter of $23.8 million, but in line with the consensus figure.

The company reported revenue of $13.7 million in the United States for the quarter, a bump of 47 per cent year on year, but slightly down on the Stifel Nicolaus estimate which pegged revenue for the quarter to come in at $14.5 million, the same figure as that recorded for the last quarter of 2012.

The analyst, Lara J. King, singled out the company’s newly grown margins for mention in her note.

“In 2012, Aveda closed some of its underperforming locations in Canada and, in the United States, shifted assets to higher-activity regions. In our opinion, Aveda's ability to grow its EBITDA margins meaningfully demonstrates the success of this program. We believe that Aveda's expanded rental assets are also having a positive impact on the company's EBITDA margins.”

In Canada, revenue of $9.8 million was reported, well down on the year ago figure of $13.2 million for a drop of 26 per cent, but 5 per cent up on Stifel’s estimate of $9.3 million.

"Through the hard work of our team members, we were able to achieve profitable results despite market weakness in certain locations," said president and chief executive officer Kevin Roycraft, in a company statement released with the figures. "The Aveda team is off to a strong start, we will continue to build upon the success we have achieved."

Shares in the company were lately trading flat on the TSX Venture Exchange on the day of the announcements, with the stock rising as high as $2.35 and as low as $2.25 in intraday trading from an open of $2.30.
View full AVE profile View Profile

Aveda Transportation and Energy Services Timeline

Related Articles

Rig prices can soar when exploration activity picks up

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright ©, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use