Aegion Corporation (Nasdaq Global Select Market: AEGN) today revised its 2013 outlook based on November actual results and an update to the forecast for December. The Company now expects non-GAAP full year earnings per share from continuing operations to be in the range of $1.27 to $1.32 from an earlier guidance of $1.53 to $1.60. This includes a half year contribution from Brinderson within the previous range of $0.08 to $0.10. Non-GAAP diluted earnings per share from continuing operations in the fourth quarter are now forecasted to be in the range of $0.40 to $0.45.
Commercial and Structural’s North American business continued to struggle to build momentum in the US during October and November as a result of the following previously discussed factors: (1) lower workable backlog from a stall in sales activity that is being addressed by the ongoing investment in our sales organization; (2) project performance issues from inadequate cost estimation on several key projects in late 2012; (3) customers taking more time to finalize the award of new contracts and issue work releases; and (4) certain delays in the setup of new projects in hand, which delayed project execution. We continue our efforts to enhance the sales organization to properly resource and align the organization in its primary end markets: pipelines, buildings and transportation. Similar to our efforts with North American Water and Wastewater in 2010 and 2011, we also are instituting best-in-class project management to ensure consistency in execution on all projects. The Company believes these efforts will lead to improved sales acquisitions and project execution in 2014. Commercial and Structural’s expected results account for approximately half of the shortfall to the Company’s prior guidance.
The revised fourth quarter outlook also reflects a shift in project activity into 2014 for several businesses. The Canadian construction season is proceeding at an uncharacteristically slow pace affecting United Pipeline Systems’ and Bayou’s Canadian operations. The pace for offshore pipe welding by the general contractor for the Saudi Arabia Wasit gas field project has been below predicted levels and it is not expected to improve in December based on a just completed assessment of the project, which significantly reduces the number of available welded joint coatings for CRTS. Several important projects for the Asia-Pacific water and wastewater business also did not begin as scheduled in the fourth quarter.
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