) reported second-quarter fiscal 2014 adjusted earnings of $1.37
per share excluding a 10 cent impact from the one-time costs due to
the acquisition deal with AECOM Corporation (
). The earnings came well ahead of the Zacks Consensus Estimate of
76 cents and also increased 40% from 91 cents delivered in the
Urs Corporation - Earnings Surprise |
Total revenue came in at $2,555 million, down 8.5% from $2,792
million in the prior-year quarter and it also lagged the Zacks
Consensus Estimate of $2,705 million. At the end of the quarter,
the company had a backlog of $10.6 billion, down 6.2% from $11.3
billion at the end of last year. It reported book of business worth
$22.4 billion as against $22.8 billion as of Jan 3, 2014.
The decline in revenues was owing to the weakness in key market
sectors including Federal, Oil & Gas and Power, which reported
a year-over-year decline in revenues. However, revenues from
sectors like Infrastructure and Industrial remained flat year over
year. Also, despite the favorable Department of Defense budget, the
sector continues to be impacted by the chemical demilitarization
contracts, which reported a year-over-year revenue decline of 20.4%
to $117 million.
URS Corp. reported cash earnings per share (Cash EPS), which
denotes operating cash flow/number of shares. Cash EPS for the
quarter stood at $1.50 a share, up 29% from $1.16 a share in the
prior-year quarter. Operating income in the quarter decreased 5% to
Infrastructure and Environment segment
reported revenues of $824 million, down 13.0% year over year. The
segment operating income was $52 million, down 13.3% from $60
million recorded in the prior-year quarter.
Federal Services segment
reported a revenue decline of 7.8% year over year to $728 million.
On the other hand, the segment operating income increased 6.7% to
$95 million in the quarter.
Energy and Construction segment
revenues came in at $562 million, a decline of 12.3% from the
prior-year quarter. The operating income came in at $16
million, down 23.8% compared with $21 million in the prior-year
Oil & gas segment
registered revenues of $463 million, up 0.9% year over year, while
the operating income improved to $2 million, compared with the
operating loss of $2 million in the year-ago quarter.
Other Financial Details
URS ended the quarter with cash and cash equivalents of $283
million, long-term debt of $1,779 million and shareholders' equity
of $4,088 million.
The company's operating cash flow in the quarter was $394
million, versus $40 million in the prior-year quarter. The upside
was driven by efficient working capital management.
Last week, the company declared a cash dividend of 22 cents a
share that will be paid on Oct 10, 2014 to stockholders of record
on Sep 19, 2014.
In July, the company announced its acquisition by AECOM for
about $4 billion. The transaction, likely to close in Oct 2014, has
a total enterprise value of about $6 billion. Per the terms of the
deal, URS shareholders will receive per share consideration of
$33.00 in cash and 0.734 shares of AECOM common stock.
Post merger, the combined entity is likely to become one of the
largest companies in the engineering and construction industry, in
terms of revenues.
URS Corp. currently has a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the engineering and diversified sector
worth considering at the moment include Willdan Group Inc.(
) and VSE Corp. (
). While Willdan sports a Zacks Rank #1 (Strong Buy), VSE carries a
Zacks Rank #2 (Buy).
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