Layne Christensen Earnings: Everything You Must Know Now

Layne Christensen Co. (NASDAQ:LAYN) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Layne Christensen Co. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 368% to $1.17 in the quarter versus EPS of $0.25 in the year-earlier quarter.

Revenue: Decreased 19.88% to $232 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Layne Christensen Co. reported adjusted EPS income of $1.17 per share. By that measure, the company beat the mean analyst estimate of $-0.39. It missed the average revenue estimate of $260.61 million.

Quoting Management: “The $57.3 million of non-cash items recorded during Q2 FY 2014 had a material impact on our results, as did the continued weakness at Geoconstruction along with reduced profits at Mineral Exploration. Although some of our end markets remain challenging, we expect our divisions will improve their performance in the second half of FY 2014 although neither Mineral Exploration or the equity earnings from our affiliates is likely to improve in the short term. We base this belief on the sequential quarterly progress demonstrated at Heavy Civil, Water Resources, and Inliner. We reported essentially break-even results at Heavy Civil for Q2 FY 2014, and we believe that this business has now turned the corner and will return to profitability later in FY 2014. Water Resources returned to profitability from a modest loss in Q1 FY 2014, and Inliner continues to progress towards an eighth consecutive year of record revenue and profits. The outlook at Geoconstruction is improving, with bid-and-proposal activity that we believe will manifest in higher backlog beginning in Q3 FY 2014 and improved division financial results beginning in the following quarter. Despite reasonably strong commodity prices, our mining clients have continued to defer mineral exploration programs. Our Mineral Exploration division continues to operate profitably despite the downturn and we continue to take the necessary steps to maintain division profitability during this period of industry uncertainty. At Energy Services, we now expect to be at a $20 million revenue run rate by Q2 FY 2015 slightly later than we originally forecast but we expect narrower losses for the second half of FY 2014. We have also completed $17.8 million of non-core business divestitures and asset sales this year. Finally, under our One Layne initiative, we are pursuing approximately $1.3 billion of potential projects that leverage and combine the unique skill sets of our division professionals,” stated Rene J. Robichaud, President and Chief Executive Officer.

Key Stats (on next page)…

Revenue increased 2.45% from $226.45 million in the previous quarter. EPS increased to $1.17 in the quarter versus EPS of $-0.81 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.13 to a profit $0.08. For the current year, the average estimate has moved down from a loss of $0.90 to a loss of $1.41 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]