URS Loss from Goodwill Impairment - Analyst Blog
November 09 2011 - 11:02AM
Zacks
URS Corp. (URS) reported third-quarter fiscal
2011 loss per share of $8.05 compared with earnings per share of 87
cents in third-quarter 2010. The Zacks Digest Consensus Estimate
for earnings per share were 99 cents.
During the quarter, the company recorded a goodwill impairment
charge of $9.03 per share, resulting in a reported loss per share.
The goodwill impairment charge is mainly led by adverse stock
market conditions that led to a decrease in the company's stock
price as of September 30, 2011. Excluding this charge, earnings per
share would have been 98 cents in the quarter.
Total Revenue
Total revenue in the quarter was $2.47 billion compared with
$2.34 billion in the prior-year quarter. The company continues to
see positive trends in most of its operating markets. URS Corp.’s
backlog was $16.0 billion at the end of the third quarter of 2011
compared with $16.6 billion as of December 31, 2010.
Segment Result
Infrastructure and Environment revenue in the
quarter was $950.8 million compared with $818.2 million in the
prior-year quarter. The segment revenue included $112.8 million
contribution from Scott Wilson Group plc, acquired by URS in
September 2010.
Federal Services revenue was $718.7 million
compared with $645.2 million, aided by strong demand for URS’
specialized engineering and technical services. The federal segment
revenue in the quarter included $78.6 million contribution from
Apptis Holdings Inc., acquired in June 2011.
Energy and Construction revenue was $844.6
million compared with $898.6 million in the prior-year period.
Income and Expenses
As a result of goodwill impairment charge of $798.1 million, the
company incurred an operating loss of $620.2 million compared with
an operating profit of $162.2 million in the prior-year period.
General and administrative expenses were $18.5 million compared
with $21.5 million.
Balance Sheet and Cash Flow
Cash and cash equivalents were $427.1 million at the end of the
third-quarter of 2011 compared with $573.8 million at the end of
2010. Long-term debt was $690.8 million compared with $641.3
million and shareowners equity was $3.62 billion compared with
$4.20 billion at the end of 2010.
Outlook
The company expects its 2011 revenue to be in the range of $9.6
billion to $9.8 billion and EPS in the range of $(5.30) to $(5.40).
before the non-cash, after-tax goodwill impairment charge diluted
EPS is expected to be in the range of $3.60 to $3.70, same as
previously provided guidance.
URS Corp. was originally incorporated in California on May 1,
1957 as Broadview Research Corporation. On May 18, 1976, it was
re-incorporated in Delaware under the name URS Corporation. The
name “URS Corporation” was formally adopted on February 21, 1990.
Major competitors of URS are AECOM Technology
Corporation (ACM), Fluor Corporation
(FLR) and KBR Inc. (KBR).
We currently maintain our Neutral rating on URS Corp. with a
Zacks #4 Rank (short-term Sell recommendation) over the next
one-to-three months.
AECOM TECH CORP (ACM): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
KBR INC (KBR): Free Stock Analysis Report
URS CORP (URS): Free Stock Analysis Report
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