Encompass Stock DipsWith Earnings Shortfall
The company anticipates reporting third-quarter earnings of $0.16 to $0.18 per diluted share, compared to current First Call/Thomson Financial consensus estimates of $0.42 per diluted share. For the fourth quarter, the company estimates it will report earnings of $0.25 to $0.30 per diluted share, below consensus estimates of $0.38.
Along with the earnings expect-ations announcement, Encompass management said it has identified 11 operating units that will be eliminated due to poor performance or strategic incompatibility. The units, represent-ing approximately $110 million in annual revenue, will be closed, sold, or merged with other Encompass locations.
“Over the past three years, Encompass has acquired almost 150 operating units to quickly become the nation’s premier provider of facilities services,” said Joe Ivey, president and ceo. “However, in our continuing integration activities, we have raised performance standards significantly higher than when we were acquiring companies.
“In doing so we have identified a handful of operating units that have underperformed beyond the normal ebb and flow of business or that simply are not strategic fits. We are taking steps to eliminate their impact on our company.”
Publication date: 10/16/2000