Foster Wheeler Q1 Profit Rises, But Results Miss Estimates

(RTTNews) - Engineering and construction contractor Foster Wheeler AG (FWLT) reported Wednesday a profit for the first quarter that grew from last year, which was weighed down by loss from discontinued operations. This despite a revenue drop. Both adjusted earnings per share and quarterly revenues significantly missed analysts' expectations.

Separately, the company also said its shareholders have approved the payment of a one-time cash dividend of $0.40 per registered share, payable on or about May 21 to shareholders of record as of May 7, 2014.

"Our adjusted income for the first quarter of 2014 was below the average quarter of 2013 due to a 17% decline in operating EBITDA from continuing operations and a higher effective tax rate. Nevertheless, we were encouraged to see a sharp rebound in the first quarter of 2014 in scope new orders in the Global Power Group, as compared to the average quarter of 2013," CEO Kent Masters said in a statement.

The Geneva, Switzerland-based company reported net income of $17.07 million or $0.17 per share for the first quarter, higher than $13.03 million or $0.12 per share in the prior-year quarter.

The company recorded a net loss attributable to non-controlling interests of $2.13 million, compared to a profit of $3.28 million last year.

Excluding items, adjusted income from continuing operations for the quarter was $19.08 million or $0.19 per share, compared to $18.90 million or $0.18 per share in the year-ago quarter.

On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude one-time items.

Operating revenues for the quarter declined to $733.70 million from $790.14 million in the same quarter last year, and missed nine Wall Street analysts' consensus estimate of $885.63 million.

Global engineering & construction group operating revenues dropped to $553 million from $588 million in the year-ago quarter, and global power group operating revenues declined to $180 million from $202 million in the prior-year quarter.

The company noted that it reported an 8 percent reduction in SG&A expenses compared to the average quarter of 2013, reflecting its efforts to improve cost effectiveness across the company.

Backlog at the end of the quarter stood at a record level of $3.85 billion, higher than $2.77 billion at the end of the year-ago quarter. New orders booked surged to $965.50 million from $531 million last year.

"In accordance with our previous guidance, the company's first-quarter adjusted income was well below what we would expect to see as a quarterly run rate in 2014, a year in which we anticipate that the company's performance will be driven by sequential-year growth in scope revenues in both of our business groups. We expect the increased volume to support favorable utilization rates for the balance of the year," Masters added.

In Wednesday's regular trading session, FWLT is currently trading at $34.19, down $0.09 or 0.23% on a volume of 0.25 million shares.