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"Stuart Olson Inc is a Canada-based company. It operates in business segments that are Industrial Group, which offers services to clients in a wide range of industrial sectors including oil and gas, petrochemical, refining, water and waste water, mining, pulp and paper and power generation; Buildings Group, which includes construction, expansion and renovation of buildings for private and... see more

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Stuart Olson Inc > What is 2018-4Q Revenue going to be?

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Post by RetailRube on Feb 13, 2019 11:19am

What is 2018-4Q Revenue going to be?

I sold everything. I have owned SOX all the way back to 2015. I bought it as a turnaround story. But what I read in the MD&A and heard in the 2018-3Q earnings conference call are not consistent with what I see in the numbers. I could very well be wrong. Time will tell.

My big issue is the revenue has declined for 3 quarters sequentially in 2018. This is important to me because in 2018-3Q, excluding mark-to-market profit from the stock price going down, they only made about $500,000 in after tax earnings (by my calculations). So if the 2018-4Q revenue is down again vs 2018-3Q, they may report a loss in 4Q (excluding mtm profit from the stock price going down).

What is your guess on 2018-4Q revenue?

2017-1Q: $220m
2017-2Q: 246
2017-3Q: 268
2017-4Q: 283 (FY=$1,017m)
2018-1Q: 266
2018-2Q: 249
2018-3Q: 224
2018-4Q: 250 (my guess based on guidance "FY slightly lower") (FY=$989)

Analysts are no help. Analysts consensus estimate of revenue in 2018-2Q was too high by $25m and in 2018-3Q was too high by $49m.

I don't believe my guess of $250m for 2018-4Q.

So I moved to the sidelines until things become clearer.

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Comment by mike49 on Feb 16, 2019 2:56pm

I'm out too. Most comments I have heard from analysts are like huff-post pieces on a celebrity. I agree that there is a disconnect between the talk and the books. What I see is a cost overrun from industrial side that may or may not be material in the auditted, questionable valuation of tartan and future there, and a very well compensated c-suite. In the end I think that this all boils down to ...more

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Comment by Capharnaum on Mar 04, 2019 7:58pm

I believe the variance in revenue is related to project accounting which means you "report" revenue specifically at certain points of a project. This can make revenues move up and down. Free cash flow, which excludes mark to market gains/losses, was about the same (slightly up) in Q3 2018 vs Q3 2017. I'm not a shareholder of SOX but I am looking into it. The acquisition of Tartan ...more

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Comment by Capharnaum on Mar 05, 2019 9:38pm

Nice call... nailed it. Revenue down, a loss and a 50% cut to the dividend. From the NR, looks like Q1 & Q2 2019 will be weak as well. They say things will be better in Q3 & Q4 but imo they'll be in a "show-me" mode. At least they will be able to fund buying back the convertible debentures. I guess share price will test the lows.

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