Specialty industrial service provider Team Inc. (TISI), Tuesday reported a plunge in profit for the second quarter, hurt by a decline in the revenue and gross margin. Looking ahead, the company reaffirmed its forecast for fiscal year 2010.
Alvin, Texas based Team's second quarter net income plunged to $5.8 million or $0.30 per share from $10.2 million or $0.51 per share in the year ago period.
Results for the quarter included pre-tax, non-routine legal and accounting costs of $1.2 million, or after tax per share earnings of $0.04 related to an ongoing, independent investigation. Excluding the non-routine costs, net income reported was $6.6 million or $0.34 per share for the second quarter.
On average, eight analysts polled by Thomson Reuters expected the company to earn $0.30 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenue for the second quarter declined to $123.3 million from $148.8 million in the comparable quarter last year. Four Street analysts estimated revenue of $122.26 million for the quarter.
Revenue from the TCM division decreased to $71.3 million from $76.1 million a year ago, while TMS division revenue slumped to $51.9 million from $72.6 million last year.
Team's gross margin for the quarter was $39.5 million, down from $50.0 million in the prior year quarter. Operating income for the quarter was $10.3 million, compared to $18.4 million in the prior year quarter. Operating expense declined to $83.8 million from $98.7 million in the same quarter last year.
For the six-month period, Team reported net income of $6.9 million or $0.36 per share, compared to $15.2 million or $0.76 per share in the prior year period. Revenue declined to $224.3 million from $272.0 million last year.
Look ahead, the company reaffirmed its earnings forecast for the 2010 in the range of $0.85 - $1.05 per share, excluding the effect of the non-routine charges. Earnings guidance is based on the expectation that revenues in the second half of the year will be approximately 10% higher than in the first half of the year.
Analysts currently expect earnings of $0.95 per share for the year, on revenue of $469.62million.
TISI closed Tuesday's regular trading at $18.91, down $0.39 or 2.02%, on a volume of 0.11 million shares on the Nasdaq.
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