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URS Corporation (URS - Analyst Report) reported fourth-quarter and fiscal 2013 results on Mar 3, 2014. Non-GAAP earnings for the quarter were 26 cents per share, which beat the Zacks Consensus Estimate of 19 cents by 36.8%. However, quarterly earnings were down 72.6% year over year from 95 cents.

URS Corp. reported profit in Cash earnings per share (EPS), which is operating cash flow/Diluted Number of Shares. Cash EPS for the fourth quarter was $3.45 a share versus $1.76 a share in the prior-year quarter.

For fiscal 2013, non-GAAP earnings per share came in at $4.71 a share which was 13.9% below the previous year’s earnings of $5.47 a share. GAAP earnings came in at $3.31 a share which was also lower by 20.6% from $4.17 reported in the prior year. GAAP earnings for the year were in line with the company’s narrowed guidance mentioned during its preliminary review of the full year’s results.

Cash EPS for the year was $4.26 a share versus $5.06 a share in the prior-year quarter.

Weak execution of orders in the company’s new Oil & Gas division (formed after the acquisition of Flint Energy Services) was cited as the primary reason for its reduced projection of profits and turnover. Further, the company mentioned that it witnessed project delays due to residual effects of lower-than-expected natural gas prices and pipeline capacity.

Total Revenue

Total revenue in the quarter was $2.66 billion, down 10.5% compared with $2.97 billion in the prior-year quarter and it missed the Zacks Consensus Estimate of $2.71 billion.

Annual revenues cane in at $10.9 billion which was flat year over year. Revenues for the year were also in line with the company’s trimmed guidance provided during its preliminary review.

At the end of the year, the company had a backlog of $11.3 billion, down 15% versus a backlog of $13.3 billion at the end of 2012. It reported book of business of $22.8 billion, down from $24.9 billion as on Dec 28, 2012.

Segment Result

For fiscal 2013, the Infrastructure and Environment segment reported revenues of $3.8 billion which was flat year over year, while operating revenues were $214.1, down 3.1% compared with operating income of $220.9 in 2012.

The Federal Services segment reported revenues of $2.3 billion and operating income of $268.5 million in fiscal 2013. Revenues were down 14.8% while operating income was up 7.7% versus 2012.

In 2013, the Energy and Construction segmentreported revenues of $2.9 billion and operating income of $175.8 million compared with revenues of $3.1 billion and operating income of $254.2 million in fiscal 2012.

The Oil & gas segment in fiscal 2013, reported revenues of $2.2 billion up 47% year over year while operating income came in at $9.9 million compared with $61.2 million in 2012.

Income and Expenses

Operating income in the quarter was $113.5 million, down 33.8% from $171.4 million in the prior-year quarter. For fiscal 2013, operating income was down 13.9% year over year to $590.8 million.

Balance Sheet, Cash Flow Share Repurchase and Dividend

Cash and cash equivalents were $283.7 million at the end of the year, compared with $314.5 million as on Dec 28, 2012. Long-term debt was $1.7 billion compared with $1.9 billion as on Dec 28, 2012 and shareowners’ equity was $4.2 billion as on Jan 3, 2014.

The company’s operating cash flow in 2013 was $255.9 million, versus $131.1 million in 2012, an increase of 95.2% from last year, driven by efficient working capital management.

URS Corp. is accelerating its prior plan to return a total of at least $500 million to its shareholders through stock repurchases and dividends by the end of 2015. In fiscal 2014, URS expects to spend approximately $350 million on stock repurchases and as of Feb 28, 2014, URS has repurchased 2.8 million shares, with $129.5 million remaining.

On Feb 28, the board of directors declared a quarterly cash dividend of 22 cents per share, an increase of 4.8% from 21 cents earlier. The new dividend will be paid on Apr 11, 2014 to shareholders of record as of Mar 21, 2014.

Outlook

Following the earnings release, URS expects revenues for fiscal 2014 to be in the range of $10.8 billion to $11.2 billion while fiscal 2014 EPS is projected in the range of $3.20 to $3.50.

Cash EPS for fiscal 2014 is expected in the rage of $4.13–$4.43 a share, on a fully diluted basis. The guidance for 2014 includes the wind down of the company's highly successful work on the DoDs chemical weapons demilitarization (Chem Demil) program.

This apart, in 2014, the company expects revenues from this program to decrease by approximately $355 million and operating income to decrease by approximately $125 million. Operating cash flow is expected in the range of $725 million and $775 million in fiscal 2014.

URS currently has a Zacks Rank #5 (Sell). However, some better-ranked stocks in the engineering and diversified sector worth considering the moment include Quanta Services, Inc. (PWR - Analyst Report), AECOM Technology Corporation (ACM - Analyst Report) and Enersys Inc. (ENS - Snapshot Report), all of which have a Zacks Rank #2 (Buy).

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