Foster Wheeler Outperforms - Analyst Blog
May 02 2012 - 12:54PM
Zacks
Foster Wheeler AG (FWLT) reported first-quarter
2012 earnings per share from continuing operations of 40 cents
compared with 19 cents in the prior-year quarter. The company
surpassed the Zacks Consensus Estimate by a penny.
Including an asbestos-related provision, earnings per share in
the quarter came in at 38 cents, up 11.6% compared with 18 cents in
the prior-year quarter.
Total Revenue
Consolidated operating revenue in the quarter was $933.1
million, up 10% compared with $1.04 billion in the prior-year
period. FW scope revenue, excluding revenues relating to
third-party cost incurred by the company as agent or principal on a
reimbursable basis, was $625.0 million compared with $568.8
million.
Segment Results
Global Engineering and Construction (E&C) Group’s operating
revenue (FW scope) was $365.0 million, up 1.7% compared with $358.8
million in the prior-year period. In the reported quarter, orders,
which are generally of small and medium sizes, declined to $375.8
million from $561.5 million.
Global Power Group (GPG) operating revenue (FW Scope) increased
to $260.0 million from $210.0 million in the prior-year period, up
23.8%, led by backlog executed steadily. New order in the segment
increased to $159.4 million compared with $141.3 million in the
prior-year period.
Income & Expenses
Contract profit in the quarter was $139.3 million, up 40%
compared with $99.3 million in the prior-year quarter. SG&A
expense was $83.3 million, up 12.9% compared with $73.8 million in
the year-ago quarter.
E&C EBTDA was $46.9 million in the quarter, up 12.5%
compared with $41.7 million in the prior-year quarter and GPG
EBITDA was $52.3 million, up 97.4% compared with $26.5 million in
the year-ago comparable period.
Balance Sheet
Cash and cash equivalents at the end of March 2012 were $648.9
million compared with $718.0 billion at the end of 2011. Long-term
debt was $138.3 million compared with $136.4 million and
shareholders’ equity was $736.5 million compared with $687.7
million at the end of 2011.
During the reported quarter, the company repurchased 564,100
shares for approximately $10.1 million.
Outlook
The company expects Global E&C Group and Global Power Group
scope revenue to increase in 2012 versus 2011. Global E&C
Group EBITDA margin on scope revenue in 2012 is expected to be in
the range of 12%–14% and for Global Power Group in the range of
16%-18%.
Further, Foster Wheeler expects its earnings per share to
increase significantly in 2012 versus 2011 with an expected rise in
volume and a decline in share count.
Foster Wheeler AG is based in Zug Switzerland, but its
operational headquarters are in Clinton NJ USA. Majority of
Foster’s revenues and new businesses originate from outside the
United States. The company serves the following industries:
Oil and Gas; Oil Refining; Chemical & Petrochemical;
Pharmaceutical; Environmental; Power Generation; and Power Plant
Operation and Maintenance. Major competitors of Foster Wheeler are
Fluor Corporation (FLR) and Jacobs
Engineering Group Inc. (JEC).
We maintain a Zacks #2 Rank (Buy recommendation) over the next
one-to-three months on Foster Wheeler.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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