Foster Wheeler AG
reported earnings of $13.0 million or 12 cents per share in the
first quarter of 2013 compared to $40.6 million or 38 cents per
share. Earnings were 29.4% below the Zacks Consensus Estimate of
17 cents. In the first quarter of 2012 earnings were $40.6
million, or $0.38 per diluted share.
. Adjusted earnings
per share in the quarter came in at 14 cents a
share versus 40 cents in the year-ago quarter.
Consolidated operating revenue in the quarter was $796.3
million, down 14.7% year over year as compared to $933.1 million
in the prior-year quarter. The decline in the top line was
primarily due to lower revenues across both its operating
Global Engineering and Construction
(E&C) Group's operating revenue was $587.97. million, down
12.4% from $670.9 million in the prior-year period. However, the
segment reported a 30% decline in new orders bookings during the
quarter. The orders mainly consist of many small and medium-sized
contracts. In addition, the results were adversely affected by a
$10.5 million loss arising from mark-to-market foreign currency
losses. The segment ended the quarter with a backlog in future
revenues of $2.7 billion.
Global Power Group's
(GPG) operating revenue was $208.3 million, down 20.5% from
$262.2 million in the year-ago quarter. New orders in the segment
were $198.9 million, 23% udown versus $161.7 million in the
prior-year quarter. The decline was attributable to a lack of
boiler orders. The segment ended the quarter with a backlog
of $740.9 million.
Income & Expenses
Contract profit in the quarter was $115.7 million, down 16.96%
from the prior-year quarter's level of $139.3 million, primarily
due to lower orders in the GPG segment and higher sales and
overhead expenses in the E&C segment. Also, the small and
medium sized orders had lower margins and, hence, resulted in a
less favorable utilization rate. SG&A expense was $90.5
million, up 8.5% from $83.3 million in the year-ago quarter.
E&C EBTDA was $35.2 million in the quarter compared with
$46.9 million in the year-ago quarter. GPG EBITDA was $24.7
million in the quarter versus $52.3 million in the year-ago
Cash and cash equivalents at the end of Mar 31, 2013 were
$475.7 million, down from $582.3 million at the end of Dec 31,
2012. Long-term debt was $121.3 million, down from $124 million
at the end of Dec 31, 2012. Shareholders' equity was $688.3
million, down from $714.0 million at the end of Dec 31, 2012.
During the reported quarter, the company repurchased 1.5
million shares for about $34 million. Subsequent to the
quarter-end the company also repurchased 2,972,700 shares for
approximately $66 million. As of May 2, 2013, the company had
approximately $320 million remaining under its authorized share
Looking ahead to the balance of 2013, the company expects the
economy to revive globally. Consequently, the company expects
adjusted earnings per share in 2013 to be flat to marginally down
compared to 2012, excluding the impairment charge.
EBITDA in the Global E&C Group in 2013 is expected to
increase year over year. Adjusted EBITDA margin is expected to be
in the range of 10% to 12%. However, Foster expects a marginal
decline in EBITDA in the Global Power Group in 2013, due to the
lower level of new orders. EBITDA margins in both the business
groups are expected to be weaker in the second quarter of
Foster currently has a Zacks Rank #5 (Strong Sell). Some other
players in the industry that can be considered are
Harris & Harris Group, Inc.
), all of which currently have a Zacks Rank #2 (Buy).
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