URS to Benefit from Stimulus

URS Corp. (URS - Snapshot Report) reported Q4-08 results, which include the contribution of Washington Group Int’l, acquired in November (Q4) of 2007. Revenues for the quarter were $2.71 billion, up 55.7%; the Operating Margin expanded from 3.85% to 4.12%, Net Income as a percentage of Revenue rose from 1.52% to 1.67% and EPS of 55¢ were up by 41.0% from 39¢. Backlog of $17.2 billion declined by 2.3%, but is expected to increase as the effect of the economic stimulus package permeates the E&C sector.

With respect to URS’s 3 divisions -- URS, EG&G and Washington -- Revenue was up in all 3, as was Operating Income; however, the Operating Margin declined somewhat in the EG&G Division, while it rose in the other two.

On the conference call, the Company indicated that about $130 billion of the $787 billion economic stimulus bill targets URS’s competencies. Interestingly, more than half of the bill is going to Federally-managed projects -- as opposed to State & Local, which had been URS’s most-significant market.

The Company projects that 2009 Revenue will be in the range of $9.5 billion to $10.0 billion (as compared to $10.1 billion in ’08); the breakdown of these projected Revenues is (in billions of $): Federal = 3.9 to 4.0, Infrastructure = 1.9 to 2.0, Power = 1.4 to 1.6 and Industrial = 2.3 to 2.4. 2009 GAAP Diluted EPS are expected to be in a range $2.80 to $2.95 (versus $2.66).

URS is a Zacks "pick to click" with the Obama budget!