Encompass Services Corp. posted a decline in net income, despite a 20 percent increase in revenues to meet Wall Street's previously lowered targets.

The Houston-based company reported third-quarter earnings of $10.2 million, or 16 cents per share, compared with pro forma earnings of $26.2 million, or 38 cents per share, a year ago.

Encompass notes that the lower results were affected by the elimination of 11 of its operating units due to underperformance. The company will eliminate the units by closing, selling or merging them with other Encompass locations. The units represent approximately $110 million in annual revenue, or less than 3 percent of expected annual revenue.

President and CEO Joe Ivey said the units were identified as having "underperformed beyond the normal ebb and flow of business," or as not strategic fits with the company.

For the fourth quarter, Encompass estimates it will report earnings of 25 cents to 30 cents per diluted share.

Revenues in the Southeastern United States are also expected to be lower, as the company does not expect its Electrical Group to meet all of its aggressive budget targets.

"This announcement breaks the string of 11 consecutive quarters in which we have met or exceeded consensus estimates," Ivey said. The company remains positive, however, as company-wide backlogs are at a record high.

In other Encompass news, William Mounger II has joined its board of directors. His career spans 18 years, primarily in the telecommunications industry. Also, Henry "Hank" Holland has been named executive vice president and chief operating officer, and Larry K.H. Jenkins has been named vice president of marketing.

Encompass, with close to $4 billion in revenue, boasts more than 31,000 employees and has operations in about 250 locations.