On Apr 10, 2014, we issued an updated research report on
). The company had earlier reported weak quarterly and fiscal
2013 results. Moreover, the company's backlog for the year was
also down from 2012 by almost 15%.
The company reported a positive earnings surprise in one of
the last four quarters, with an average beat of 5.5%. It reported
weak earnings in the fourth quarter and fiscal 2013, where
quarterly earnings were down 72.6% year over year, but were above
the Zacks Consensus Estimate by 36.8%.
Weak execution of orders in the company's new Oil & Gas
division (formed after the acquisition of Flint Energy Services)
was cited as the primary reason for its reduced projection of
profits and turnover. Further, the company mentioned that it
witnessed project delays due to residual effects of
and pipeline capacity.
In fiscal 2013, the company was impacted by planned budget
cuts by the defense sector and it was further hit due to weak
execution of projects as a result of lingering effects of
lower-than-expected natural gas prices and pipeline capacity.
Further, the company reported book of business of $22.8 billion,
down from $24.9 billion as on Dec 28, 2012.
The company's largest clients are from the federal market
sector. The Federal segment has been a drag on the company's
income for a while due to lesser contracts from the military
department. The Federal services sector has been reporting lower
revenues for approximately the past four quarters due to the
continuing delay in procurement decisions and reduction in
anticipated spending against previously awarded contracts.
Further, ongoing uncertainty related to the political impasse
that led to the U.S. government shutdown and its subsequent
effects resulted in lowered income for the company in fiscal
However, apart from project execution issues, URS Corp.'s oil
& gas business has been demonstrating strong performance
since the acquisition of Flint Energy in 2012. During the
fourth quarter of 2012, the oil & gas segment alone
contributed 29% of total revenues compared with just about 8%
during the fourth quarter of 2011.
URS Corp currently holds a Zacks Rank #5 (Strong Sell). Some
better-ranked stocks in the sector include
Quanta Services Inc
Willdan Group Inc
), all of which carry a Zacks Rank #2 (Buy).
QUANTA SERVICES (PWR): Free Stock Analysis
URS CORP (URS): Free Stock Analysis Report
VSE CORP (VSEC): Free Stock Analysis Report
WILLDAN GROUP (WLDN): Get Free Report
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