Aegion shares rise after strategy call
Aegion CEO Chuck Gordon’s message on a strategy call earlier this week was that the group’s emergence from a protracted restructuring phase is set to deliver earnings consistency over the next three years – albeit with modest topline growth prospects.
The Nasdaq-listed pipe rehabilitation specialist expects to realise low to mid single-digit average annual revenue growth through to 2019, and while Gordon’s aim may be not to over-promise, the numbers disappointed some observers.
Sidoti analyst Tate Sullivan told GWI that Aegion’s revenue outlook is “underwhelming”, and that improved investor confidence will hinge on the company’s ability to leverage its acquisition of fusible pipe company UGSI. Aegion identifies a $1 billion addressable market in North America for pressurised water piping, yet Sullivan explained that the UGSI business currently accounts for just $40 million in annualised revenues.
Aegion shares rose following the call, but are essentially flat to where they started the year.