By Braden Reddall
July 30 Engineering company Chicago Bridge &
Iron Co NV reported on Tuesday a higher-than-expected
quarterly profit, but revised lower its anticipated new orders
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
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 Austrailian 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
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
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
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
became CB&I's top shareholder with a 6.1 percent stake
earlier this year.