Layne Christensen Co. (LAYN) reported fiscal third-quarter results before the opening bell on Monday. The company’s earnings plunged 45.8% to $6.6 million, or 34 cents per share, from $12.2 million, or 63 cents per share recorded in the year-ago quarter. However, the result came in ahead of the Zacks Consensus Estimate of 21 cents per share, mainly due to improved gross margin and management’s efforts to reduce expenses.

Layne Christensen is engaged in providing drilling services and related products and services in 4 principal markets: water infrastructure, mineral exploration, geotechnical construction and oil and gas. The company’s customers include municipalities, industrial, mining, oil and gas companies and consulting and engineering firms.

The Mission Woods, KS-based company’s revenue slipped 17.7% year over year to $217.8 million. Water Infrastructure revenues slipped 12.2% to $174.3 million, primarily due to lackluster performance across all major product lines, partially offset by growth in pipeline and water and wastewater treatment construction projects. Revenues were particularly sluggish in the western U.S. on account of a slump in housing construction coupled with budget constraints on municipal government spending.

Mineral Exploration revenues plunged 42.2% to $30.7 million as sluggish economic conditions affected all the end markets of the division. The Energy segment performed better, recording an 8.1% year-over-year growth in revenues to $11.7 million due to higher prices and volumes.

Layne Christensen’s gross profit decreased 14.1% to $56.0 million; however, gross margin improved by 100 basis points to 25.7% due to a favorable margin on a flood control project in New Orleans. Selling, general and administrative (SG&A) expenses dipped by 11.7% to $31.5 million on account of lower compensation, legal and professional fees and travel expenses. Nevertheless, sluggish revenues led to a 26.5% year-over-year decline in operating income (gross profit less SG&A, and depreciation and amortization) to $10.3 million.

At the end of the quarter, the company had cash and cash equivalents of $77.4 million, compared to $43.0 million in the prior-year quarter. The company‘s total long-term debt was $6.7 million at quarter-end, compared to $26.7 million at the end of the year-ago period.

Meanwhile, the Zacks Consensus Estimate, derived from 9 covering analysts, on earnings for the fiscal year ending Jan. 2010 is currently pegged at 67 cents per share, which has edged up a penny over the past 2 months. However, the Zacks Consensus Estimate for the next fiscal has dipped by 4 cents over the same period and currently stands at 93 cents per share.

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