SNC-Lavalin Group Inc. says poorer-than-expected results on two Middle East oil-and-gas projects will have a negative impact on its earnings-per-share outlook for 2016 in its core engineering and construction business.

The Montreal-based engineering company said on Thursday it is revising its 2016 outlook for adjusted diluted earnings per share in E&C to between $1.30 and $1.60, from its previous forecast of between $1.50 to $1.70.

SNC said it continues to target annualized earnings before interest, taxes, depreciation and amortization (EBITDA) of seven per cent in 2017.

The company said the outlook on its other business segments “remains largely unchanged with the Infrastructure segment trending to be slightly better than expected.”

E&C accounts for about 60 per cent of SNC’s business.

“Following its most recent evaluation and analysis of its projects portfolio, the Company had just established, and expects to be recording in the third quarter, unfavorable cost and revenue reforecasts on two Oil & Gas projects in the Middle East,” said SNC.

It did not specify the nature of the problems or name the two projects.

The fourth quarter – which starts Saturday – should see a return to a “more normal run rate, and discussions are ongoing to attempt to resolve the commercial issues in these contracts,” said SNC.

More details will be provided in the third-quarter earnings report and conference call, the company said.