Michael Baker Corp. shares advanced Thursday after the Moon engineering company reported a big jump in first quarter profits and increased its dividend for the second time this year.
The company attributed the improved performance to eliminating about 150 jobs and other cost-cutting measures initiated late last year.
Net income totaled $5.5 million, or 57 cents per share, vs. earnings of $1.7 million, or 18 cents per share, in the year-ago quarter. Sales fell 5 percent to $144 million because of declines in work for the U.S. Department of Defense and key transportation clients, the company said. Sequestration, across-the-board federal budget cuts automatically imposed in March, resulted in a decline in federal revenue that is being offset by more private sector work, including in the energy sector, Baker executives told analysts during a conference call.
Analysts had forecast the company would report net income of 17 cents per share on sales of $139 million.
Baker said it will pay a quarterly dividend of 18 cents per share July 2, an increase of 2 cents. It also increased the dividend 2 cents in March.
The cost-cutting initiative and dividend were instituted after DC Capital Partners, an Alexandria, Va., private equity firm upset with the company's performance, took a 5.2 percent stake in Baker last summer. Earlier this year, Baker disclosed it would provide DC Capital with confidential financial information after the company agreed, for the time being, not to proceed with a $24.25 per share cash offer it made for Baker in December.
Thursday's call with analysts was hosted by H. James McKnight and Michael Zugay, who are handling CEO duties following the resignation of president and CEO Bradley L. Mallory in December.
Mr. McKnight said a number of CEO candidates have been interviewed, but could not say when the position will be filled. He also declined to say much about DC Capital or Baker's ongoing review of its strategic options.
Baker disclosed in January that it had hired investment banker Houlihan Lokey and the law firm of Jones Day to assist it with the review.
Baker shares finished Thursday at $24.85, up 75 cents. They are unchanged this year.
Len Boselovic: email@example.com or 412-263-1941. First Published May 2, 2013 9:15 AM