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Sevenson Environmental Services Inc. said Wednesday that its third-quarter profits fell by 34 percent as the Niagara Falls hazardous waste cleanup firm was battered by a sharp drop in revenues from a major project outside Philadelphia.

Sevenson said its profits fell for the first time in the last three quarters to $1.2 million, or 19 cents per share, from $1.82 million, or 29 cents per share, a year earlier.

All of the drop in earnings came from a one-time charge of about $630,000, or 10 cents per share, that Sevenson took against its profits because the company now expects to receive less work from a low level radiation cleanup project near Philadelphia.

"It's going to produce lower revenues because there's not as much work involved as we'd expected," said William J. McDermott, Sevenson's vice president of finance.

The unexpected drop in sales from that Pennsylvania project is not expected to have a lingering impact on the company. "We've got this behind us," McDermott said.

Sevenson's operating profit margins also weakened substantially during the quarter, falling to 4.9 percent from 9.9 percent a year ago, mainly because of the shortfall from the Philadelphia area project and a less favorable product mix.

"We don't feel as if the margins, in general, are down," McDermott said. "This may be more of a function of the projects we have in hand this year," which do not include very large cleanup jobs.

Despite the drop in profits, Sevenson also said its revenues rose by 6 percent to $24.9 million from $23.4 million, mainly because of a series of smaller contracts that the company has won recently, McDermott said.

"Our performance this year continues to disappoint," said Michael A. Elia, Sevenson's president.

Elia said the slower sales from the Pennsylvania project obscured what otherwise are generally favorable market conditions, which has contributed to a 15 percent increase in the company's backlog of orders to $76 million at the end of September from $66 million a year ago.

"We are receiving an increasing flow of new contracts and new business opportunities," said Elia, who thinks the trend should continue into next year.

For the first nine months of this year, Sevenson's profits fell by 8 percent to $3.94 million, or 62 cents per share, from $4.28 million, or 68 cents per share, a year earlier. Sales rose by 9 percent to $61.5 million from $56.3 million.

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