Ecology & Environment’s first-quarter profits fell by 22 percent as the Lancaster environmental services firm was stung by weakness in its Brazilian and energy markets, as well as a significantly higher tax bill.
E&E said its profits fell to $664,093, or 15 cents per share, from $847,160, or 20 cents per share, a year ago. The company’s revenues dropped by 10 percent as sales from its Walsh Environmental Services subsidiary fell by 51 percent because of weakness in the energy markets, while revenues from its Brazilian subsidiary were down by 63 percent because of less energy transmission work.
But excluding E&E’s taxes, which more than doubled during the quarter, the company’s pre-tax profits grew by 34 percent to $2.6 million from $2 million a year ago, as the company did more work for the U.S. Defense Department and other government agencies. Its U.S. energy markets also strengthened.
The improvement in its U.S. operations is a sign that the company’s efforts to reduce costs and bolster its domestic business is paying off, said Gerard A. Gallagher, E&E’s president and CEO.
But the company is facing uncertainty in Brazil, where its business has been hurt by a weak economy and the declining value of the Brazilian currency.
“We face serious challenges in South America, notably in Brazil, where we are closely monitoring economic conditions and reducing operating costs in response to lower project activity,” Gallagher said in a statement.