Shares of AtkinsRealis (formerly known as SNC-Lavalin Group) rose in early trading Friday after the company revealed a higher third-quarter profit. This increase was driven by a disposal and better-than-expected revenue.

At 10:34 a.m. ET, shares were trading 6.3% higher at 42.97 Canadian dollars ($32.12).

The Canadian project-management company reported that revenues exceeded expectations, reaching C$2.2 billion from C$1.89 billion. Analysts, as polled on FactSet, had a consensus expectation of more modest growth to C$2 billion.

Strong performances from its engineering services and nuclear businesses contributed to the positive results. These segments experienced revenue growth of 29% and 23.4%, respectively, and were robust across the company’s core geographies, according to Chief Executive Ian Edwards.

The company saw its net income double, rising to C$105 million, or C$0.60 a share, from C$44.7 million, or C$0.25 a share, in the same quarter of the previous year. AtkinsRealis also benefited from a net gain of C$46.2 million on the disposal of its Scandinavian engineering services business.

Although AtkinsRealis’ stock price has increased by nearly 81% in 2023, Michael Doumet of Scotiabank believes that the company still lags behind its peers.

Doumet suggests that AtkinsRealis needs to achieve more consistent free cash flow, improve margins, and work towards divesting Linxon—a joint venture project with Hitachi ABB Power Grids focused on delivering turnkey electrical AC substation projects.

As the business completes its transformation, Doumet believes that its valuation should align more closely with its peers.

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