Onex posts US$388-million Q3 profit, mostly from discontinued operations

TORONTO – Onex Corp. (TSX:OCX) is reporting a US$388-million net profit for the third quarter, bringing the total for the first nine months of 2014 to US$526 million.

The Toronto-based company invests in a wide variety of industries and its quarterly results can swing dramatically depending on assets sales, purchases and other factors.

This year’s third quarter included a number of major asset sales, allowing the company to realize profits on its previous investments.

Compared with last year, this year’s third-quarter profit was down from $399 million but the nine-month profit compared with a $590-million loss.

Net income in the third quarter ended Sept. 30 included $365 million from discontinued operations that have been sold or marked for sale.

Earnings per share for the three-month period totalled $3.31 per subordinate voting share, up from $3.22 a year eariler. Over nine months, Onex has had $2.12 per share of net earnings, compared with a loss of $4.88 last year.

Onex realized $1.9 billion of gains from asset sales — its share of $5.9 billion in proceeds from transactions involving the company and its partners.

“We’re very happy with the volume and success of realizations this year,” said Gerry Schwartz, Onex chairman and chief executive officer.

“Our challenge remains to find great businesses at reasonable prices. With a robust pipeline and the recent volatility in the markets, we are hopeful prices moderate and allow us to find some new investment opportunities.”

Consolidated sales from within the Onex group of companies, which reports in U.S. currency, totalled $5.00 billion in the thrd quarter, down from $5.13 billion in the third quarter of 2013. The largest source of revenue was electronics manufacturing services, mostly from Celestica (TSX:CLS), which totalled $1.423 billion — little changed from $1.491 billion last year.

Onex groups companies also gets significant revenues from businesses that offer healthcare imaging, customer care services, building products, and insurance services. In addition, Onex receives fees for managing assets and interest and dividends from some of its investments.