Downer EDI shares are on a tear

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Shares in Downer EDI surged after the engineering group lifted its earnings forecast for the rest of the year.

A short time ago, they were up 15% to $7.21.

The company today posted an 8.5% rise in after tax profit to $78.2 million for the half year to December. Total revenue increased 1.7% to $3.6 billion.

Downer is now targeting net profit of around $175 million for the 2017 financial year, up from $163 million previously.

The improved outlook comes as the company continues to reposition itself from the mining sector to roads and rail, public transport, utilities, communications and defence.

“Overall it has been a very strong operational and financial performance,” says CEO Grant Fenn.

“Work-in-hand has increased over 13% during the half to $21.1 billion with major contracts wins in both Australia and New Zealand including High Capacity Metro Trains in Victoria and Sydney Growth Trains in New South Wales.”

The company declared a fully franked dividend of 12 cents, steady on the same time last year.

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