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Chicago Bridge & Iron Secures Multiple Technology Contracts
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Chicago Bridge & Iron Company N.V. recently announced that it has clinched multiple technology contracts from chemical products manufacturer, Tianjin Bohua Chemical Development Co. Ltd., to build a grassroots petrochemicals plant in Tianjin, China. This is the company’s second major project in China in a week.
Earlier, Chicago Bridge & Irons had inked a strategic alliance with Jinzhou Port Co., Ltd. (Jingang) which entails it to act as the master licensor for an integrated refining and petrochemicals project in Jinzhou City, China.
For the current contract, the leading technology and infrastructure provider will offer license and engineering design to three units — an ethylbenzene unit, a methanol to olefins (MTO) light olefins recovery unit and a polypropylene unit. Chicago Bridge & Iron’s proprietary technologies, including the Novolen gas-phase polypropylene technology, will be used to produce a gamut of polypropylene products.
A String of Contracts
Chicago Bridge & Iron managed to secure quite a few contracts in the last month of first-quarter 2017. These contracts are likely to provide the much needed boost to its waning top line and cash flow. The most notable among them, the $1.3 billion ethane cracker project secured from Total Petrochemicals & Refining USA, Inc., a subsidiary of Total S.A. , was the fourth major one clinched by the company on the U.S. Gulf Coast.
Apart from that, the company clinched a contract to offer five proprietary technologies in an integrated refining and petrochemical project in China. Also, the company gained a contract worth $460 million from NefteGazIndustriya, LLC, which requires it to provide services to the Afipsky Oil Refinery expansion project in Krasnodar, Russia. Chicago Bridge & Iron remains bullish about its robust technology portfolio and selective opportunities in key end markets in helping it boost profitability and market share.
Besides China and the U.S., the company’s prospects in East Africa and the Middle East also look promising. For the U.S. and the Middle East, solid petrochemical investment on ethylene and low feedstock cost are projected to fuel growth. Investments in fossil power in the U.S. also bode well for the long-term growth of the company.
Energy Woes Dim Near-Term Prospects
Like most other companies operating in the energy domain (particularly oil and gas sector), volatility in commodity pricing continues to be a major drag for Chicago Bridge & Iron’s profitability. Over the past few quarters, the company witnessed a precipitous decline in capital investments, severely marring its financials.
On account of these uncertainties, the company slumped hard over the past one year, having declined 18.6% in stark contrast to the Zacks categorized Building-Heavy Construction industry’s average gain of 24.9%. Chicago Bridge & Iron’s disastrous run on the bourse continues in 2017 as well, with shares losing 4.2%, way wider than the industry’s average decline of 1.9%. The optimism around the stock post the unexpected victory of Donald Trump fizzled out soon.
Also, the colossal miss in the recently reported fourth-quarter results, did not go well with investors. Overall, the company has a drab earnings surprise history with three misses in the trailing four quarters, resulting in an average negative surprise of 13.9%. Moreover, the company holds no favor with analysts lately, as indicated by the downward revision of the Zacks Consensus Estimate.
The Zacks Rank #5 (Strong Sell) company has seen six downward estimate revisions compared to none upward, over the past 30 days. This has led the Zacks Consensus Estimate for 2017 to move down from $4.55 to $4.15, which indicates bearish analyst sentiment for the stock.
Dycom has a positive average earnings surprise of 17.30% for the last four quarters, having beaten estimates all through.
MasTec has an average positive surprise of 54.4%, beating estimates each time over the trailing four quarters.
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Chicago Bridge & Iron Secures Multiple Technology Contracts
Chicago Bridge & Iron Company N.V. recently announced that it has clinched multiple technology contracts from chemical products manufacturer, Tianjin Bohua Chemical Development Co. Ltd., to build a grassroots petrochemicals plant in Tianjin, China. This is the company’s second major project in China in a week.
Earlier, Chicago Bridge & Irons had inked a strategic alliance with Jinzhou Port Co., Ltd. (Jingang) which entails it to act as the master licensor for an integrated refining and petrochemicals project in Jinzhou City, China.
For the current contract, the leading technology and infrastructure provider will offer license and engineering design to three units — an ethylbenzene unit, a methanol to olefins (MTO) light olefins recovery unit and a polypropylene unit. Chicago Bridge & Iron’s proprietary technologies, including the Novolen gas-phase polypropylene technology, will be used to produce a gamut of polypropylene products.
A String of Contracts
Chicago Bridge & Iron managed to secure quite a few contracts in the last month of first-quarter 2017. These contracts are likely to provide the much needed boost to its waning top line and cash flow. The most notable among them, the $1.3 billion ethane cracker project secured from Total Petrochemicals & Refining USA, Inc., a subsidiary of Total S.A. , was the fourth major one clinched by the company on the U.S. Gulf Coast.
Apart from that, the company clinched a contract to offer five proprietary technologies in an integrated refining and petrochemical project in China. Also, the company gained a contract worth $460 million from NefteGazIndustriya, LLC, which requires it to provide services to the Afipsky Oil Refinery expansion project in Krasnodar, Russia. Chicago Bridge & Iron remains bullish about its robust technology portfolio and selective opportunities in key end markets in helping it boost profitability and market share.
Besides China and the U.S., the company’s prospects in East Africa and the Middle East also look promising. For the U.S. and the Middle East, solid petrochemical investment on ethylene and low feedstock cost are projected to fuel growth. Investments in fossil power in the U.S. also bode well for the long-term growth of the company.
Energy Woes Dim Near-Term Prospects
Like most other companies operating in the energy domain (particularly oil and gas sector), volatility in commodity pricing continues to be a major drag for Chicago Bridge & Iron’s profitability. Over the past few quarters, the company witnessed a precipitous decline in capital investments, severely marring its financials.
On account of these uncertainties, the company slumped hard over the past one year, having declined 18.6% in stark contrast to the Zacks categorized Building-Heavy Construction industry’s average gain of 24.9%. Chicago Bridge & Iron’s disastrous run on the bourse continues in 2017 as well, with shares losing 4.2%, way wider than the industry’s average decline of 1.9%. The optimism around the stock post the unexpected victory of Donald Trump fizzled out soon.
Also, the colossal miss in the recently reported fourth-quarter results, did not go well with investors. Overall, the company has a drab earnings surprise history with three misses in the trailing four quarters, resulting in an average negative surprise of 13.9%. Moreover, the company holds no favor with analysts lately, as indicated by the downward revision of the Zacks Consensus Estimate.
The Zacks Rank #5 (Strong Sell) company has seen six downward estimate revisions compared to none upward, over the past 30 days. This has led the Zacks Consensus Estimate for 2017 to move down from $4.55 to $4.15, which indicates bearish analyst sentiment for the stock.
Stocks to Consider
Better-ranked stocks in the broader sector include Dycom Industries, Inc (DY - Free Report) and MasTec, Inc. (MTZ - Free Report) . Both stocks hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dycom has a positive average earnings surprise of 17.30% for the last four quarters, having beaten estimates all through.
MasTec has an average positive surprise of 54.4%, beating estimates each time over the trailing four quarters.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>