Canada's North American Construction Q4 core profit misses estimates

Overview

• Canada heavy civil contractor's Q4 combined revenue fell 7.7%

• Adjusted EPS for Q4 was negative, down from prior year, impacted by Fargo project costs

• Q4 adjusted EBITDA was C$77.6 mln, and missed analyst expectations

Outlook

• Company expects 2026 combined revenue between C$1.5 bln and C$1.7 bln

• Company sees 2026 adjusted EBITDA of C$380 mln to C$420 mln

• Company projects 2026 free cash flow of C$110 mln to C$130 mln

Result Drivers

• FARGO PROJECT COSTS - One-time C$13 mln cost catch-up on Fargo-Moorhead project severely impacted Q4 adjusted EBITDA and EPS

• AUSTRALIA GROWTH - Australian operations delivered record Q4 revenue, up 10% year-over-year, driven by higher volumes from new assets and contract wins

• CANADA REVENUE DECLINE - Canadian heavy equipment revenue fell 10%

Company press release: ID:nGNX4CCVkF

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil related services and equipment peer group is "buy"

• Wall Street's median 12-month price target for North American Construction Group Ltd is C$26.00, about 14% above its March 11 closing price of C$22.80

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 6 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.