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Chicago Bridge & Iron's Contract Winning Streak Continues
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Chicago Bridge & Iron Company N.V.’s continued its contract-winning streak as its consortium with Saipem S.p.A. won a contract with Duqm Refinery and Petrochemicals Industries Company L.L.C. (DRPIC). DRPIC — a collaboration between Kuwait Petroleum International and Oman Oil Company — awarded an EPC Package 3 contract for the Duqm Refinery Project.
The scope of work under the contract for Package 3 includes the engineering, procurement and construction (“EPC”) of a product export terminal at Duqm Port, a crude tank farm at Ras Markaz and an 80-kilometer crude oil pipeline. Chicago Bridge & Iron will be responsible for the EPC work for storage tanks at the export terminal and crude tank farm, while Saipem will execute the remaining work. Chicago Bridge & Iron's share of the contract is worth about $140 million.
The company will leverage its decades-old experience of working in Oman, which includes supply of tanks and pressure spheres for Oman Oil Company at the refineries in Sohar and Muscat.
Chicago Bridge & Iron has won several contracts in the recent past. Just last week, the company secured a contract worth approximately $50 million for a storage project in Central Asia. In August too, it won two such contracts. The company also secured technology contracts from four PetroChina refineries for the license, engineering design and proprietary equipment supply for an alkylation unit at each of the four sites. In addition, it won a contract from Técnicas Reunidas, S.A. for new product storage tanks for Saudi Aramco's refinery in Ras Tanura, Saudi Arabia.
Despite the contract wins, Chicago Bridge & Iron has been treading rough waters, of late. The company plunged to eight-year lows, following its dreary Q2 results. Investors are abandoning the stock in droves, in light of the miserable guidance and a dividend suspension. The stock has lost 52.2% of its value year to date, much worse than the industry’s decline of 6.3%.
This energy infrastructure services firm was forced to take desperate actions to shore up its financial position after reporting a considerable drop in revenues and huge loss in second-quarter 2017. The company’s margins were deeply affected by a rise in cost of two gas turbine projects and two LNG export facility projects.
The company also booked substantial charges (roughly $548 million pretax) in relation to four Engineering projects. Lower-than-expected labor productivity, elevated costs for fabrication, and craft labor, weather-related delays, subcontractor and indirect costs were responsible for the cost overruns. The company’s new CEO, Patrick Mullen, announced a flurry of measures to address its chronically poor project execution, improve efficiency and strengthen the balance sheet.
Not surprisingly, the analyst community has also been distinctly bearish on the stock in recent times. Chicago Bridge & Iron’s earnings estimates have moved south sharply in the past 60 days, with the Zacks Consensus Estimate for 2017 descending from earnings of $3.28 to a loss of $1.71, on the back of four downward estimate revisions versus none upward.
Chicago Bridge & Iron Company N.V. Price and Consensus
In light of the numerous headwinds that have been plaguing the company and the miserable analyst outlook for earnings, we have a Zacks Rank #5 (Strong Sell) on the company.
Beazer Homes USA managed to beat earnings twice over the trailing four quarters. It has an impressive an average positive earnings surprise of 103.5%.
MasTec has an average positive earnings surprise of 29.7% for the last four quarters, having surpassed estimates all through.
EMCOR Group has a strong earnings beat history, having surpassed estimates thrice over the trailing four quarters. It has an average positive surprise of 11.7%.
4 Promising Stock Picks to Keep an Eye On
With news stories about computer hacking and identity theft becoming increasingly commonplace, the cybersecurity industry looks like a promising investment opportunity. But which stocks should you buy? Zacks just released Cybersecurity: An Investor’s Guide to Locking Down Profits to help answer this question.
This new Special Report gives you the information you need to make well-informed investment choices in this space. More importantly, it also highlights 4 cybersecurity picks with strong profit potential.
Image: Bigstock
Chicago Bridge & Iron's Contract Winning Streak Continues
Chicago Bridge & Iron Company N.V.’s continued its contract-winning streak as its consortium with Saipem S.p.A. won a contract with Duqm Refinery and Petrochemicals Industries Company L.L.C. (DRPIC). DRPIC — a collaboration between Kuwait Petroleum International and Oman Oil Company — awarded an EPC Package 3 contract for the Duqm Refinery Project.
The scope of work under the contract for Package 3 includes the engineering, procurement and construction (“EPC”) of a product export terminal at Duqm Port, a crude tank farm at Ras Markaz and an 80-kilometer crude oil pipeline. Chicago Bridge & Iron will be responsible for the EPC work for storage tanks at the export terminal and crude tank farm, while Saipem will execute the remaining work. Chicago Bridge & Iron's share of the contract is worth about $140 million.
The company will leverage its decades-old experience of working in Oman, which includes supply of tanks and pressure spheres for Oman Oil Company at the refineries in Sohar and Muscat.
Chicago Bridge & Iron has won several contracts in the recent past. Just last week, the company secured a contract worth approximately $50 million for a storage project in Central Asia. In August too, it won two such contracts. The company also secured technology contracts from four PetroChina refineries for the license, engineering design and proprietary equipment supply for an alkylation unit at each of the four sites. In addition, it won a contract from Técnicas Reunidas, S.A. for new product storage tanks for Saudi Aramco's refinery in Ras Tanura, Saudi Arabia.
Despite the contract wins, Chicago Bridge & Iron has been treading rough waters, of late. The company plunged to eight-year lows, following its dreary Q2 results. Investors are abandoning the stock in droves, in light of the miserable guidance and a dividend suspension. The stock has lost 52.2% of its value year to date, much worse than the industry’s decline of 6.3%.
This energy infrastructure services firm was forced to take desperate actions to shore up its financial position after reporting a considerable drop in revenues and huge loss in second-quarter 2017. The company’s margins were deeply affected by a rise in cost of two gas turbine projects and two LNG export facility projects.
The company also booked substantial charges (roughly $548 million pretax) in relation to four Engineering projects. Lower-than-expected labor productivity, elevated costs for fabrication, and craft labor, weather-related delays, subcontractor and indirect costs were responsible for the cost overruns. The company’s new CEO, Patrick Mullen, announced a flurry of measures to address its chronically poor project execution, improve efficiency and strengthen the balance sheet.
Not surprisingly, the analyst community has also been distinctly bearish on the stock in recent times. Chicago Bridge & Iron’s earnings estimates have moved south sharply in the past 60 days, with the Zacks Consensus Estimate for 2017 descending from earnings of $3.28 to a loss of $1.71, on the back of four downward estimate revisions versus none upward.
Chicago Bridge & Iron Company N.V. Price and Consensus
Chicago Bridge & Iron Company N.V. Price and Consensus | Chicago Bridge & Iron Company N.V. Quote
In light of the numerous headwinds that have been plaguing the company and the miserable analyst outlook for earnings, we have a Zacks Rank #5 (Strong Sell) on the company.
Stocks to Consider
A few better-ranked stocks in the broader sector include Beazer Homes USA, Inc. (BZH - Free Report) , MasTec, Inc. (MTZ - Free Report) and EMCOR Group, Inc. (EME - Free Report) . While Beazer Homes and MasTec sport a Zacks Rank #1 (Strong Buy), EMCOR Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beazer Homes USA managed to beat earnings twice over the trailing four quarters. It has an impressive an average positive earnings surprise of 103.5%.
MasTec has an average positive earnings surprise of 29.7% for the last four quarters, having surpassed estimates all through.
EMCOR Group has a strong earnings beat history, having surpassed estimates thrice over the trailing four quarters. It has an average positive surprise of 11.7%.
4 Promising Stock Picks to Keep an Eye On
With news stories about computer hacking and identity theft becoming increasingly commonplace, the cybersecurity industry looks like a promising investment opportunity. But which stocks should you buy? Zacks just released Cybersecurity: An Investor’s Guide to Locking Down Profits to help answer this question.
This new Special Report gives you the information you need to make well-informed investment choices in this space. More importantly, it also highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>