Team Profit Falls, Cuts Outlook; Stock Down - Update

(RTTNews) - Specialty industrial services provider Team Inc. (TISI), Tuesday reported a decline in first-quarter profit, due mainly to poor margins and lower revenue at its Quest Integrity Group segment. Both earnings and revenue for the quarter fell short of Wall Street estimates.

The company slashed its outlook for 2014, citing near-term pressures on margins. Following the announcement, shares of Team sank nine percent in after-hours trade on the New York Stock Exchange.

Sugar Land, Texas-based Team posted quarterly net income to common stock of $4.5 million or $0.21 per share, compared with $7.6 million or $0.36 per share last year.

Excluding one-time severance costs, adjusted earnings for the quarter were $5 million or $0.23 per share. On average, seven analysts polled by Thomson Reuters estimated earnings of $0.36 per share for the quarter. Analysts' estimates typically exclude special items.

Team provides inspection, engineering assessment, and field heat treating services, among others.

Revenue for the first quarter climbed to $174 million from $161.5 million for the prior year. Analysts estimated revenue of $176.70 million for the quarter.

The company said that Quest segment's performance reflects some material project delays into the upcoming quarters plus expanded spending rates to support future business growth.

Inspection & Heat Treating and Mechanical Services combined business segment revenue grew about 10 percent, but gross margins came under pressure.

Team's board has authorized the repurchase of up to an initial $25 million of its common stock effective immediately.

For fiscal 2014, Team now expects earnings of $1.55 to $1.85 per share and revenue of $765 million to $790 million. The company had earlier estimated earnings of $1.90 to $2.05 per share and revenue of $775 million to $800 million.

Analysts currently expect earnings of $2.00 per share on revenue of $793.08 million for the year.

Team stock closed Tuesday at $40.00, up $0.25 or 0.63%, on a volume of 150 thousand shares. In after hours, the stock dropped $3.75 or 9.37%, to trade at $36.25.