DOW JONES NEWSWIRES
Foster Wheeler Ltd.'s (FWLT) first-quarter earnings slumped 47%
as the engineering and construction company saw a drop in volume,
helping push results below analysts' expectations.
Concerns such as Foster Wheeler and rivals Fluor Corp. (FLR) and
Jacobs Engineering Group Inc. (JEC) are vulnerable to a prolonged
downturn in oil and natural gas prices as producers scale back on
projects. Tight credit and the recession pose a likely deterrent to
big construction projects.
Foster Wheeler reported a profit of $72.9 million, or 57 cents a
share, down from $138.1 million, or 95 cents a share, a year
earlier. Excluding various charges and gains, earnings fell to 59
cents from 85 cents.
Revenue decreased 30% to $1.26 billion.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 68 cents on revenue of $1.51 billion.
Gross margin rose to 12.9% from 12.1% on lower costs.
Despite the quarter's weakness, Chairman and Chief Executive
Raymond Milchovich highlighted Foster Wheeler getting its
biggest-ever contract by man-hours for a new oil refinery in India.
The project is just gearing up and didn't contribute materially to
first-quarter results, he said.
Foster Wheeler had bounced back in recent years from a string of
losses, helped by increased energy-industry demand. But the company
in recent quarters has seen weak demand in that sector.
Shares closed at $24.04 on Tuesday and didn't trade premarket.
The company's stock is down by roughly two-thirds in the past
year.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com