CB&I profit tops estimates, but order outlook tempered
(Reuters) - Engineering company Chicago Bridge & Iron Co NV (CBI.N) reported on Tuesday a higher-than-expected quarterly profit, but revised lower its anticipated new orders this year.
New awards for 2013 are now expected to be between $11 billion and $15 billion, down from $13 billion to $16 billion forecast in March, the company said.
In explaining the expected lower orders, Chief Executive Philip Asherman cited the timing of major engineering awards and delays in governmental approvals. The company's own revenue and profit expectations remain the same for the year, however, he added.
Asherman said on a conference call that about 30 percent of CB&I's new awards in the second half of the year would be for liquefied natural gas (LNG) projects, including mechanical and electrical installation work on major Australian projects.
The CEO did not elaborate on the government delays.
There is an intense national debate over how quickly the U.S. government should sign off on new projects to export LNG, given opposition from domestic gas consumers who are enjoying current low prices.
CB&I said its second-quarter net income rose to $106 million, or 98 cents per share, from $72 million, or 74 cents a share, a year ago. Adjusted earnings were $1.04 per share, and analysts expected $1.03, according to the average on Thomson Reuters I/B/E/S.
Revenue rose 119 percent to $2.9 billion, boosted by its acquisition of Shaw Group this year, more than the $2.8 billion estimated by analysts.
The company's backlog of projects fell by $1 billion over the quarter to $24.5 billion, which is second only to Fluor Corp (FLR.N) among U.S.-listed engineering companies. Fluor reports results on Thursday.
CB&I did front-end engineering and design for the Freeport LNG export terminal, which just received federal approval.
The company is seen as the most likely to win LNG export work in the U.S. given its track record building U.S. LNG import terminals.
One analyst had estimated Freeport could add $3 billion to its backlog if the full engineering and construction contract is awarded by the end of 2013, but Asherman said the company should still make at least the lower end of its new order estimate range even without Freeport.
As for prospects, there were three other U.S. LNG export projects in the works that CB&I expected to at least "participate" in, he added.
CB&I shares are up 29 percent so far in 2013, whereas Fluor is up just 3 percent. Warren Buffett's Berkshire Hathaway (BRKa.N) became CB&I's top shareholder with a 6.1 percent stake earlier this year.
(Reporting by Braden Reddall in San Francisco; Editing by Phil Berlowitz, Bernard Orr and Carol Bishopric)