EA Engineering posts 75% rise in net income


Hoping to boost its stock price and impress a gathering of analysts, EA Engineering, Science and Technology Inc. yesterday released its fiscal-second-quarter earnings a week early, showing net income had soared by 75 percent.

"We felt our results were pretty good and we wanted to get them into the hands of the marketplace as soon as possible," said Craig D. Snyder, director of office administration for the Hunt Valley environmental services company.

The release also coincided with a conference on environmental stocks being held by the brokerage company Raymond James & Associates in St. Petersburg, Fla.

The good news seemed to have the desired effect -- the stock was nudged up 50 cents a share yesterday, to close at $6.25.

During the quarter that ended Feb. 28, net income for the company climbed to about $500,000, or 8 cents a share, compared with $285,500, or 5 cents a share, for the same period a year ago. Revenue during the quarter jumped by 14 percent to $16 million, from $14 million.

For the six months that ended Feb. 28, net income increased by 50 percent, to about $1.2 million, or 20 cents a share, from $771,000, or 13 cents a share, a year ago. Revenue rose by 13 percent, to about $34 million, from $30 million last year.

Mr. Snyder attributed the results to the company's record backlog of work that primarily consists of government contracts for environmental cleanups on closing military bases. That backlog stood at $496 million at the end of November. Profits were increased further because the company is able to use its staff more efficiently as the workload increases, he said.

Despite its impressive earnings, the company's stock has been in the doldrums, trading in the $5 to $6 range, down from its high of $12.50 last July.

This is partly the result of worries that the Republican-controlled Congress will hurt companies supplying environmental services, according to Laurence C. Baker, an analyst for Legg Mason Inc., a Baltimore brokerage.

But he said he expects profits at EA to continue to rise in the next three to four years because of its backlog. "One of the things that doesn't happen forever is a divergence between earnings and stock price," he said.

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