Chicago Bridge & Iron Company N.V.
posted first-quarter adjusted earnings of $94.4 million or $0.87
per share (excluding one-time items), 22.3% below the Zacks
Consensus Estimate of $1.12 per share. Adjusted net income,
however, improved 12% year over year on the back of strong
project activities during the quarter.
Increased backlog levels, growing demand for energy across the
globe, CBI's unique business model and its diligent operational
execution, while focusing on safety, are the key drivers behind
the company's year-over-year profit.
Total Revenue & Contracts
Revenues for the quarter marked an impressive year-over-year
increase of 30% to $2.93 billion. The rise was driven by healthy
revenue growth across all the three legacy business units of CBI
owing to increased demand for energy infrastructure, especially
in the Liquefied Natural Gas (LNG), gas processing as well as oil
and gas markets throughout the world.
In the first quarter of 2014, new contracts totaled $5.7
billion (up 198% year over year), driven by new deals penned by
the Engineering, Construction and Maintenance segment.
The company reported revenue growth across all four of its
Engineering, Construction and Maintenance
segment's revenues increased 393% year over year to $4.9 billion.
The increase was brought about primarily by a greater number of
The company's oil and gas business unit reported healthy
growth with significant revenue increase related to increased LNG
and gas processing activity in the Asia-Pacific region. The
continuation of significant activities at CBI's plant maintenance
business as well as power and nuclear projects further drove
reported first-quarter 2014 revenues of $493.9 million, declining
31% year on year. The decline was due to customer delays which
resulted in underutilization of the company's pipe fabrication
recorded revenues of $144 million, compared with $151.4 million
in the prior-year quarter. The decline in revenues was due to
The Environmental Solutions
segment reported revenues of $184.9 million. This segment's
performance was aided by a large number of projects ranging from
small environmental compliance projects to large engineering,
procurement and construction (EPC) projects for the federal
Gross profit for the quarter grew 23% year over year to $301.4
million. Operating income was $162.4 million, up 88% year over
year. The increase in operating profit was primarily driven by
accretive acquisitions and higher revenues from the oil and gas
as well as Fabrication services business units. Operating profit
margin also increased 200 basis points.
Balance Sheet & Cash Flow
At quarter-end, the company had shareholders' equity of more
than $2.6 billion, along with long-term debt of $1.6 billion.
Cash flow from operating activities was a negative $145.7 million
as against a positive $312 million in the prior-year quarter.
Exiting the quarter, the company had cash and cash equivalents
of $420.5 million, down from $643.4 million in the prior-year
CBI currently has a Zacks Rank #3 (Hold). Some better-raked
stocks in the sector are
India Globalization Capital Inc
). All three carry a Zacks Rank #2 (Buy).
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