) recently announced that it expects revenues and earnings for
fiscal 2013 to be lower compared with its previous guidance. The
company's lower guidance is based on a preliminary review of 2013
results. Following this news, shares of the company crashed
almost 14% on Thursday, Feb 13, and closed at $42.51 versus a
close of $49.36 on Wednesday.
URS reported that currently it expects earnings to be in the
range of $3.20 to $3.30, compared with the previous guidance of
$4.10 to $4.25 a share. In the third quarter of 2013 also, the
company had trimmed the earnings guidance from $4.25 to $4.50 a
share to $4.10 to $4.25.
This apart, URS Corp. expects to report consolidated annual
revenues in the range of $10.8 billion to $11.2 billion which is
at the low end of its previous guidance of $11.0 billion to $11.5
URS Cop. cited weak execution of orders in the company's new
Oil & Gas division (formed after the acquisition of Flint
Energy Services) 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
lower-than-expected natural gas prices and pipeline capacity.
Both these unfavorable situations, together, had an impact of
about $40 million on the operating income of the segment.
In the last-reported quarter (third-quarter 2013) as well, the
oil & gas division reported revenues of $532.6 million, which
declined 10.1% from $592.2 million in the third quarter of 2012.
The decline was due to continued effects of unfavorable weather
conditions and floods in western Canada in the previous
Apart from the top and bottom lines, the company provided a
preliminary outlook on the rest of 2014 and mentioned that
although it has lowered its guidance, it is positive about the
company's performance, going forward. The company's industrial,
infrastructure and power divisions continue to perform well.
However, the Federal segment is expected to be impacted by the
sequestration effects. This apart, the segment also is expected
to reported lower revenues year-over-year due to the slow down of
the work on the DoD's chemical weapons demilitarization program.
In 2014, the company expects revenues from this program to
decrease by approximately $355 million, thereby decreasing
operating income by roughly $125 million.
Based on its preliminary review, URS expects 2014 operating
cash flow to be between $725 million and $775 million. Further,
the company is accelerating its previously-announced plan to
return a total of at least $500 million to stockholders through
stock repurchases and dividends by the end of 2015. URS now
expects to spend approximately $350 million for stock repurchases
URS Corp. currently holds a Zacks Rank #4 (Sell). Other
better-ranked stocks in the engineering and diversified services
AECOM Technology Corp.
Quanta Services Inc
), all of which carry a Zacks Rank #2 (Buy).
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URS CORP (URS): Free Stock Analysis Report
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