Calian Technologies Ltd. saw both revenues and profits decline in its second quarter, with top-line earnings for its business and technology services division hit by the effect of earlier Easter holidays and a change in the government procurement cycle.

The Kanata-based staffing and planning services company, which was founded by Ottawa Mayor Larry O'Brien who is still a member of its board, said revenues dropped 6.8 per cent to $47.4 million, while net income fell to $2.3 million or 28 cents per share from $2.5 million or 30 cents per share.

Despite declines in revenues for both its systems engineering division (SED) and its business and technology services (BTS) segment, the company blamed most of its losses on difficulties for its BTS business, which saw revenues drop 6.6 per cent to just over $33 million.

"An extended government procurement cycle ... caused delays in expected procurements (for the BTS segment) as well as constrained spending on existing contracts, as government departments modified their spending profile to preserve funding in anticipation of further delays in the renewal process," said Calian CEO Ray Basler in a statement, who added that the earlier Easter holidays in March meant that it had lower revenues and margins compared to a year earlier.

However, Mr. Basler was positive on Calian's SED results, although revenues for the segment fell 7.1 per cent to $14.4 million, as operational profitability improved due to a higher material component in last year's second-quarter revenues.

"Higher labour utilization, excellent project control and positive project closeouts contributed to SED achieving margin percentages that were significantly higher than the prior year," Mr. Basler said. "With higher margins and tight control of operating costs, the division recorded its highest quarterly contribution for a number of years."

Despite the disappointing BTS results, Calian remained upbeat on its expected performance over the next few quarters and increased its dividend to 15 cents per share.

However, the company also slightly lowered its top-end expectations for fiscal 2008, with consolidated revenues now anticipated to be between $190 million and $200 million with net earnings per share of $1.10 to $1.20.

Calian had previously predicted revenues of $190 million to $210 million and per-share profits of $1.10 to $1.25.