Foster Wheeler Q3 Profit Down 13%, Affirms Full-year Outlook

(RTTNews) - Engineering and construction contractor Foster Wheeler AG (FWLT) on Thursday reported a 13 percent decline in profit for the third quarter from last year, reflecting higher expenses and an asbestos-related provision that more than offset double-digit growth in revenues.

Looking ahead, the company forecast adjusted earnings for the fourth quarter to be down sequentially, but maintained its earnings outlook for fiscal 2013.

Separately, Foster Wheeler named Roberto Penno as chief executive officer of the company's Global Engineering and Construction Group.

Kent Masters, Chief Executive Officer of Foster Wheeler's said, "Our adjusted income from continuing operations in the third quarter of 2013 was above the average quarter of 2012 due largely to an increase in EBITDA in our Global Engineering and Construction (E&C) Group, partially offset by an EBITDA decline in the Global Power Group."

Masters said, "In addition to its strong operating performance, our Global E&C Group set new quarterly records for scope backlog and scope new orders."

Segment wise, Global Engineering & Construction Group revenues for the quarter rose 6 percent to $615.03 million, while Foster Wheeler Scope revenues rose 16 percent to $440.63 million. However, Global Power Group revenues declined 15 percent to $186.80 million.

Switzerland-based Foster Wheeler's net income for the third quarter was $50.61 million or $0.51 per share, down from $58.22 million or $0.54 per share in the same period last year. The results for both, the latest as well as the year-ago quarters include net asbestos-related provision of $2 million or $0.02 per share each.

The company's income from continuing operations in the latest quarter included a net $5.4 million after-tax benefit from mark-to-market currency fluctuations, which were primarily related to the reversal of mark-to-market currency losses that had been reported in the first quarter.

Excluding items, adjusted income from continuing operations for the quarter was $50.85 million or $0.52 per share, compared with $60.67 million or $0.57 per share in the year-ago quarter. On average, sixteen analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share for the quarter. Analysts' estimates typically exclude special items.

Operating revenues for the quarter rose 11 percent to $801.83 million from $797.30 million in the prior-year quarter. Analysts had a consensus revenue estimate of $891.61 million.

Looking ahead to the fourth quarter, Foster Wheeler forecasts adjusted earnings per share from continuing operations to be down sequentially from the third quarter. Analysts expect the company to earn $0.48 per share for the quarter.

For fiscal 2013, Foster Wheeler affirmed its outlook for adjusted earnings per share from continuing operations to be moderately above $1.54. Analysts expect the company to report earnings of $1.58 per share for the year.

In a separate statement, Foster Wheeler said it has appointed Roberto Penno, aged 53, as chief executive officer of the company's Global Engineering and Construction Group. Penno succeeds Umberto della Sala in that role.

Penno's appointment is effective November 11. However, he will continue to have responsibility for the company's Asia-Pacific region until his successor in that role is named. Della Sala, aged 64, will continue to serve as the company's chief operating officer.

Penno has most recently served as CEO of the Global E&C Group's Asia-Pacific Region. A 25-year veteran of Foster Wheeler, he has held a variety of positions with the company, including managing director of Global Sales, Marketing and Strategic Planning; director of commercial operations for Foster Wheeler Asia Pacific; and other senior roles in operating unit management, sales and commercial management in Europe, Asia and the U.S.

FWLT closed Wednesday's trading at $27.06, down $0.39 on a volume of 1.71 million shares.