GTS Duratek's earnings fell 10 percent in third quarter Start-up costs at projects in Texas, South Carolina are blamed

November 06, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

GTS Duratek Inc., the Columbia-based technology company involved in environmental cleanup, reported yesterday a 10 percent decline in third-quarter earnings despite a 22 percent surge in sales.

The company reported net income of $426,000 from revenues of $11.5 million in the quarter ended Sept. 30. That compared with a profit of $473,000 and revenues of $9.4 million in the same period last year.

On a per share basis, net income was equal to zero, compared with 1 cent in the third quarter of 1995.

For the first nine months, the company earned $1.4 million, or 2 cents a share, from revenues of $33.5 million. That compares with a profit of $1.2 million, or 2 cents a share, from revenues of $28.9 million in the like part of last year.

Duratek attributed its lower quarterly earnings to higher-than-anticipated start-up costs at two major projects.

Robert F. Shawver, executive vice president, said the company's DuraTherm complex near Houston lost money in the most recent quarter. The facility, an 80 percent owned subsidiary, recycles petrochemical waste.

Shawver said the Texas operation, which began operation in May, did not get enough waste to process in the quarter to maintain a profitable operation.

He said a delay in the start-up of a plant to convert low-level nuclear waste into glass at the federal government's Savannah River nuclear complex in South Carolina also took away from third-quarter earnings.

Duratek has a $14 million fixed-price contract to process a certain amount of waste.

The Savannah River plant was activated last month.

"Both operations are running well now and both hold good revenue and profit growth potential for the company's future," Shawver said.

Duratek's president, Robert E. Prince, cited the start-up of commercial operation at Savannah River as one of the company's important milestones this year.

Another was winning a $27 million contract for the first phase of a radioactive cleanup project at the government's Hanford nuclear complex in Richland, Wash. That puts Duratek in line to compete for an estimated $4 billion of work at that site.

Duratek's stock closed at $11.25, down 25 cents.

Noting that Duratek's stock has risen sharply this year, Luke Smith, an analyst with Chesapeake Securities Inc. in Towson, said the "company is trading on future prospects for large government contracts rather than current earnings."

Pub Date: 11/06/96

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