SNC-Lavalin cuts 2016 profit outlook, citing 2 troubled Mid-East oil-gas projects

MONTREAL – SNC-Lavalin Group Inc. (TSX:SNC) is lowering its profit expectations for this year, saying two oil and gas projects in the Middle East have under performed in the third quarter.

The Montreal-based company says it now estimates between $1.30 and $1.60 of adjusted earnings per share from its engineering and construction business in fiscal 2016 — down about nine per cent at the midpoint.

The previous estimates were between $1.50 and $1.70 per share after adjustments.

SNC says the revised outlook follows “unfavourable cost and revenue reforecasts” on the two oil and gas projects, which it didn’t identify.

Few details were disclosed about the problem, but SNC says it is in talks to resolve the issues and it expects to see a more normal situation in its fourth quarter, which begins Saturday.

It also said the outlook for SNC’s other business segments remains largely unchanged, with the infrastructure segment trending to be slightly better than expected.