Construction and industrial services company The Churchill Corp. (TSE:CUQ) released weak preliminary second quarter estimates Monday, as the company expects disappointing results due to unfortunate weather circumstances and project execution delays.
Shares plunged more than 28 per cent after the news, falling to $8.44 Monday afternoon.
Churchill’s outlook for the second quarter is for revenue in the range of $292 to $298 million, compared to sales of $340.9 million in the second quarter of 2011.
Earnings before interest, taxes, depreciation and amortization for the quarter is expected to be between $4.4 to $4.8 million, compared to $17.0 million in the year-earlier period.
The company forecasts net loss to be around $4.0 to $4.4 million, or 16 to 18 cents per share, compared to net earnings of $5.8 million last year.
Analysts expected net earnings of 16 cents per share, on higher sales of $352 million.
The company anticipates a loss in its industrial services Broda Construction unit due to frequent rain, which reduced utilization of Broda’s earthmoving equipment in May and June, leading to reduced earnings at its Calgary Airport Runway project, and Saskatoon residential project.
Churchill also attributed the lower results to administrative delays in starting new mining projects in Northern Saskatchewan, leading to the deferral of revenue during the quarter.
The company's Stuart Olson Dominion Construction unit also saw delays in structural steel work that changed the project schedule and execution, adding costs at the Investors Group Field project in Winnipeg, Manitoba.
The company said it does not generally provide financial guidance to capital markets, but chose to do so only because its second quarter estimates are well below analyst forecasts.
"We are clearly disappointed with these preliminary estimates," said Churchill’s president and CEO, Jim Houck.
"We will provide more commentary on these specific project execution challenges during the July 23, 2012 conference call and in our financial results for the three and six months ended June 30, 2012, which will be released on August 8, 2012."
Churchill offers building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to a wide range of public and private sector clients located in Canada.
The company operates office locations in British Columbia, Alberta, Saskatchewan, Manitoba and northern Ontario.