* EPS C$0.50 vs previous C$0.44
* Revenue down 7 pct at C$342.8 mln
* Moderate growth seen in second half of 2010
* Stock falls 1.4 pct to C$26.29 on TSX
(Adds forecast, analyst comment, updates stock price)
OTTAWA Feb 24 Stantec Inc (STN.TO) (STN.N)
posted a 14.5 percent rise in quarterly earnings on Thursday as
lower taxes and more profitable projects at the Canadian design
and engineering firm offset a decline in revenue.
Tough market conditions pressured results in the quarter
ended Dec. 31, Stantec said, and improvement is not expected
any time soon. It forecast moderate revenue growth in the
second half of 2010 for regions where it is a top-tier service
"Due to the diversity of our operations, the mixture of
our clients, and the flexibility of our organization, we
believe that we can continue adapting our business to changing
economic conditions and that we will emerge well positioned as
the market improves," it said in a statement.
The company, which has a history of aggressive deal-making,
repeated its target for long-term, average annual compound
gross revenue growth of 15 percent.
Net earnings rose to C$22.9 million ($21.6 million), or 50
Canadian cents a share, in the three months ending Dec. 31,
2009, from C$20 million, or 44 Canadian cents, in the same
period the year before.
Revenue fell 7 percent to C$342.8 million.
Analysts, on average, had expected the acquisitive company
to earn 49 Canadian cents a share on net revenue of C$311.3
million, according to Thomson Reuters I/B/E/S.
Shares of Stantec fell 38 Canadian cents, or 1.4 percent,
to C$26.29 on the Toronto Stock Exchange on Thursday and
dropped 55 cents, or 2 percent, to $24.75 on New York in
The company also said it remains confident it can continue
taking advantage of acquisition opportunities, because the bulk
of the sector's 100,000 firms are small companies.
RBC Capital Markets analyst Sara O'Brien said pace at which
Stantec makes acquisitions may slow because takeover targets
are unwilling to "revise expectations" despite a weak economy.
Stantec plans to expand its work in international markets
to 20 percent of revenue in 2020, from 2 percent now. That
expansion, expected from internal growth rather than
acquisitions, is seen largely in Anstralia, England and other
parts of Europe, Stantec said.
The Edmonton, Alberta-based company's recent projects
include an expansion to the Vancouver International Airport, an
extension to the Edmonton South light rail transit system and
the design of the Whistler Sliding Center, the venue for the
2010 Winter Olympic luge, skeleton and bobsleigh sliding
($1 = $1.06 Canadian)
(Reporting by Susan Taylor; Editing by Frank McGurty)