M&A may have to wait amid trade war, but WSP Global CEO sanguine as profits rise

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MONTREAL — WSP Global Inc. remains largely insulated from tariff fallout and cost-cutting by the U.S. government, but acquisitions at the engineering giant may have to take a back seat amid broader economic uncertainty, says chief executive Alexandre L’Heureux.

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“The worst thing that can happen for an M&A environment to be prosperous is to have instability and a lack of visibility into the future,” he told analysts on a conference call Thursday.

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“A lot of players are on the sidelines and are waiting for good conditions.”

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As it watched and waited, the Montreal-based company racked up a 14 per cent profit increase year-over-year.

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It grew its backlog 17 per cent to a record $16.60 billion, despite the U.S. administration’s aversion to spending on big projects hatched in recent years.

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The firm also drew on its October purchase of Power Engineers — an American engineering and environmental consulting company with 4,000 employees — to help reach nearly six per cent organic revenue growth in the United States, which accounts for 40 per cent of WSP’s net sales.

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L’Heureux said transport and infrastructure, the company’s largest segment, enjoys “minimal exposure at the federal level” south of the border, with clients including state and local governments as well as private customers.

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However, those lower-tier governments depend on federal funding for infrastructure investments, and a massive chunk of the US$1 trillion in annual grants they receive from Washington, D.C., is in jeopardy.

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U.S. President Donald Trump in January froze all federal payments to local governments before scrapping the memo days later. But agencies are going ahead with funding reviews prompted by an executive order. Last week, the president proposed big budget cuts to domestic agencies.

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“I’m not going to sit here telling you that there are no uncertainties. That’s not true. Our clients are — like you, like me _ wondering. And, as I said, this is a very fluid environment,” L’Heureux stated.

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“Do I feel that it is impacting us directly as a company? The answer is no.”

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On Thursday, WSP reported net earnings attributable to shareholders of $144.1 million in the three months ended March 29, up from $126.8 million in the same period a year earlier.

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Revenue climbed 22 per cent to $4.39 billion in the first quarter from $3.59 billion the year before.

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On an adjusted basis, net earnings increased to $1.76 per share from $1.55 per share, beating analysts’ expectations of $1.71 per share, according to financial markets firm LSEG Data & Analytics.

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This report by The Canadian Press was first published May 8, 2025.

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Companies in this story: (TSX:WSP)

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