Foster Wheeler Q3 Profit Halves, Results Miss Estimates

(RTTNews) - Engineering and construction contractor Foster Wheeler AG (FWLT) reported Monday a profit for the third quarter that halved from last year, despite revenue growth, reflecting higher costs. Both adjusted earnings per share from continuing operations and quarterly revenues significantly missed analysts' expectations.

"We experienced a moderate reduction in adjusted income from continuing operations in the third quarter of 2014 compared to the average quarter of 2013, due to increased costs incurred on the AMEC transaction and a higher tax rate," CEO Kent Masters said in a statement.

The Geneva, Switzerland-based company reported net income of $25.44 million or $0.25 per share for the third quarter, lower than $50.61 million or $0.51 per share in the prior-year quarter.

Excluding net asbestos-related gains and provisions, adjusted income from continuing operations for the quarter was $27.40 million or $0.27 per share, compared to $50.85 million or $0.52 per share in the year-ago quarter.

Further excluding $0.04 per share of special item, adjusted income from continuing operations for the latest quarter was $30.9 million or $0.31 per share. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude one-time items.

Operating revenues for the quarter grew to $859.72 million from $801.83 million in the same quarter last year, but missed five Wall Street analysts' consensus estimate of $929.88 million.

Global engineering & construction group operating revenues grew to $693.73 million from $615.03 million in the year-ago quarter, while global power group operating revenues declined to $166.0 million from $186.80 million in the prior-year quarter.

"EBITDA from operations in the third quarter of 2014 was comparable to the average quarter of 2013, with higher EBITDA in our Global Engineering and Construction Group (E&C) driven by increased level of activity, offset by lower EBITDA in our Global Power Group (GPG) due to timing of new orders, mix of work executed and reduced margin," Masters noted.

Backlog at the end of the quarter stood at $4.12 billion, higher than $3.94 billion at the end of the year-ago quarter. New orders booked plunged to $619.7 million from $1.68 billion last year.

"Both business groups continue to operate very well in a challenging environment. We continue to expect a material increase in scope revenues for E&C in full-year 2014 relative to full-year 2013, with a modest decline in full-year 2014 scope revenues compared to the previous year for GPG due to timing and mix of new orders," Masters added.

FWLT closed Friday's regular trading session at $31.03, up $0.27 on a volume of 0.34 million shares.