We are reaffirming our Neutral recommendation on Chicago Bridge & Iron Company, or CB&I ( CBI - Analyst Report ) . The company delivered a solid fourth-quarter performance with earnings up 11% year over year and top-line growth of 32%. CBI benefited from the rising demand worldwide for energy infrastructure, especially in the LNG, gas processing and oil sands markets.

Projects from around the world drove the upside during the year. Chicago Bridge & Iron is very positive about the increase in order activity in the LNG division, but market uncertainties increase the possibility of cancellations or push-outs that may impact the cash flow and earnings of the company going forward.

Chicago Bridge & Iron is expected to benefit from the strong and growing energy infrastructure market, especially the liquefied natural gas (LNG). LNG is the company’s strongest business, supported by its ability to participate in multiple stages of development and strong base for investments.

The company is one of the few engineering, procurement and construction (EPC) and process technology contractors with in-house fabrication facilities, which allow it to offer customers the option of modular construction, wherever feasible.

Modular construction, in contrast to the traditional onsite “stick built” construction, enables modules to be built within a tightly monitored shop environment and allows better quality control, minimizes weather delays and expedites schedules. This leads to faster lead times ultimately bringing in repeat orders.

In addition, EPC opportunities in gas processing look promising for the upcoming two years (2012-2013), given the attractiveness of shale gas for petrochemical producers, who intend to expand and construct new production facilities for ethylene and propylene.

Chicago Bridge & Iron is the leader in the LNG storage niche market. The companyexpects very strong near-term award opportunities in this segment specifically for LNG/low temperature storage systems (petrochemicals), an area where CB&I plans to aggressively capture market share.

In addition, the waste and waste water tanks, mineral processing storage and power applications such as liquefaction/vaporization and storage facilities are expected to be particularly strong in emerging markets, where we expect the most industrial and infrastructure growth. CB&I has been expanding into the mining sector, which should provide additional opportunities and some sector/geographic diversification around oil & gas.

However, the business is dependent upon major construction projects from clients, the unpredictable timing of which may result in significant fluctuations in cash flow and earnings between the award of the project and payment under the contract.

Revenue and earnings may be adversely affected by a reduced level of activity in the hydrocarbon industry, especially in light of the global financial and economic crisis.

Chicago Bridge & Iron currently holds a Zacks Rank #3 which implies a short term Hold rating on the stock.