Earnings Preview: Foster Wheeler - Analyst Blog
February 22 2012 - 7:30AM
Zacks
Foster Wheeler AG
(FWLT) is slated to release its fourth-quarter 2011 results on
Thursday, February 23, 2012. The current Zacks Consensus Estimate
for fourth-quarter earnings per share (EPS) is 45 cents,
representing an annualized growth of 43.6%.
For 2011, the Zacks Consensus
Estimate for earnings per share is $1.47, reflecting an estimated
decline of 15.81%.
Foster Wheeler’ earnings were below
of the Zacks Consensus Estimate by 11 cents in the last quarter and
above estimate by 18 cents in the second quarter of 2011. It had
underperformed in the first quarter of 2011 and in the fourth
quarter of 2010, with an average negative surprise of 0.07%.
Third Quarter
Highlights
Foster Wheeler reported
third-quarter 2011 earnings per share from continuing operations of
33 cents compared with 40 cents in the prior-year quarter. The
company underperformed the Zacks Consensus Estimate of 44
cents.
Consolidated operating revenue in
the quarter was $1.13 billion compared with $904.7 million in the
prior-year period.
Global Engineering and Construction
(E&C) Group’s operating revenue was $417.8 million compared
with $380.6 million in the prior-year period. Global Power Group
(GPG) operating revenue decreased to $247.4 million from $249.0
million in the prior-year period as volume of boiler work
increased.
Agreement of Estimate
Revisions
In the last 30 days, of the
analysts providing estimates on the stock, one analyst decreased
its estimates for the fourth quarter and full-year 2011. Three
analysts lowered their estimates while one increased the same for
full-year 2012. None of the analysts revised their estimate for the
first quarter of 2012.
In the last 7 days, none of the
analysts changed their estimates for fourth-quarter 2011, full-year
2011, first-quarter 2012 or full-year 2012.
Magnitude of Estimate
Revisions
In the last 30 days and 7 days, the
earnings estimates for fourth quarter, full year 2011 and first
quarter 2012 remained unchanged. For full-year 2012, the
consensus estimate decreased from $1.90 to $1.86 in the last 30
days and from $1.86 to $1.85 in the last 7 days.
Our Take
Foster Wheeler is witnessing a
growing need for capacity additions in a number of developing
countries. There is often a preference for solid fuel boilers in
these countries. The company’s CFB technology continues to be its
preferred solid fuel technology when a client has a hard-to-burn
fuel or needs flexibility in fuel type.
In third-quarter 2011, the company
has witnessed a recovery in demand for its services and received a
number of contracts. The increased activity reflects Foster’s
strong position in a wide range of market across both business
lines and geographies. Though the company delivered robust
operating performance during the third quarter of 2011, its net
income and EBITDA declined. This decline resulted from prevailing
weak market conditions.
Foster Wheeler AG is based in Zug
Switzerland, but its operational headquarters are in Clinton NJ
USA. The majority of Foster’s revenues and new businesses originate
from outside the United States. The company serves the
following industries: Oil and Gas; Oil Refining; Chemical &
Petrochemical; Pharmaceutical; Environmental; Power Generation; and
Power Plant Operation and Maintenance. Major competitors of Foster
Wheeler are Fluor Corporation (FLR) and
Jacobs Engineering Group Inc. (JEC).
We continue to maintain a Neutral
rating on Foster Wheeler, with a Zacks #3 Rank (Hold
recommendation) over the next one-to-three months.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
FOSTER WHELR AG (FWLT): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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