Back to top

Analyst Blog

The Global Engineering and Construction Group of Foster Wheeler AG (FWLT) received a contract from Petróleo Brasileiro S.A. (Petrobras) (PBR - Analyst Report) for the construction of a world-scale grassroots gas-to-chemicals complex in Linhares, Espirito Santo State, southeast Brazil. It will be called Complexo Gás-Químico UFN-IV. However, the value of the contract was not disclosed.

This complex is expected to aid in reducing Brazil’s imports of ammonia and urea fertilizers, methanol, acetic acid, plus formic acid and melamine produce. This state-of-the-art complex is expected to have a production capacity in excess of one million tonnes per annum (TPA) of these products.

As per the terms of the contract, Foster Wheeler will be providing basic engineering design (BED) and front-end engineering design (FEED). In addition, the company will also be providing technical assistance and training throughout the engineering, procurement, construction (EPC) phase.

The design part of this contract will be included in the company’s third-quarter 2012 order bookings. The BED/FEED phase is expected to be completed by the end of 2013. The provision of technical assistance and training will be included later, once the FEED is complete and Petrobras advises that it is going ahead with the EPC (implementation) phase of the project.

In the recently reported quarter, Foster Wheeler’s Global Engineering and Construction Group’s operating revenue (FW scope) was $417 million, up 14.3% compared with $365.0 million in the prior-year period. Therefore, the company has a good and a rich experience in executing large, complex integrated chemicals projects, hence proving that it has the ability to support Petrobras through to start-up of this world-scale facility.

Jacobs Engineering Group Inc. (JEC - Analyst Report) is a major competitor of Foster Wheeler with a series of contract wins over the past quarter. Foster Wheeler currently has a short term Zacks Rank of # 5 which implies a strong ‘Sell’.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GTT COMMUNI… GTT 11.65 +4.11%
ALLERGAN IN… AGN 161.82 +3.99%
CLAYTON WIL… CWEI 117.06 +3.73%
GREENBRIER… GBX 69.63 +2.37%
RF MICRO DE… RFMD 12.02 +2.04%