Boston, MA 05/12/2014 (wallstreetpr) – ENGlobal Corp (NASDAQ:ENG) is a $71 million market capped company that provides automation and engineering services. The company announced 1Q2014 financial results that exceeded the performance realized a year ago from the continuing operations. However, the results left a sour taste in the mouth of investors as shares plunged after the release of the results.
The sour taste can be linked to the higher expenses that the company reported in the latest quarter.
According to the management, the latest results are testimony to the streamlining efforts that the company undertook in late 2012 and early 2013. As such, the management believes that the encouraging 1Q results mark the beginning to good things that investors have been looking for over the years.
The divestment of non-core assets and aggressive curb on costs and expenses are expected to support bottom-line improvement even as ENGlobal Corp (NASDAQ:ENG) seeks to focus on its mainstay business.
1Q2014 at a glance
ENGlobal Corp (NASDAQ:ENG) reported 1Q2014 revenue of $26.9 million, suggesting a decrease of 46 percent from the revenue of $49.8 million in 1Q2013. However, the decline in revenue was because the latest results were without the contribution of EPCM business that was divested in August 2013. As such, on a comparable basis, the 1Q2014 revenue was up 33 percent from revenue of $20.2 million in 1Q2013 from continuing operations.
The latest quarter witnessed a net income of $1.8 million or 7 cents per share for the three months trading duration that ended March 29. The company had a net loss of $1 million or 4 cents per share from continuing operations in 1Q2013.
Though the top-line and the bottom-line improved in the latest quarter, ENGlobal Corp (NASDAQ:ENG) incurred higher expenses in 1Q2014 than in 1Q2013. Therefore, the expense in the latest quarter was $0.7 million against $0.6 million a year ago.
Executive comment
According CFO Mark Hess, things are unfolding nicely for ENGlobal Corp (NASDAQ:ENG). The company has not only started to see positive fruits for its streamlined operations but margins are also improving, and such developments have the potential of supporting bottom-line growth. Moreover, streamlined operations are expected to lead to lower overhead costs, which in turn should support bottom-line improvement.
