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Chicago Bridge Beats Estimates

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Chicago Bridge & Iron Company N.V reported fourth quarter 2012 results, with earnings per share of 91 cents increasing 9.6% from the Zacks Consensus Estimate of 83 cents and 30% from 70 cents a share earned in the year-ago quarter. The company registered solid quarterly performance driven by strong order activity during the quarter.

For full year 2012, the company reported earnings of $3.07 a share, up 2.7% from the Zacks Consensus Estimate and 20% year over year.

Total Revenue & Order

Revenue for the fourth quarter grew 22.5% year over year to $1.5 billion, driven by higher demand for energy infrastructure, especially in the LNG, gas processing and oil sands markets across the world.

In the reported quarter, new awards totaled $2.8 billion, which in turn increased the company’s backlog to $7.3 billion for 2012 with a good mix of reimbursable and lump sum contracts.

Segment Revenue

The company reported revenue growth across three of its segments. Project Engineering and Construction Segment reported year-over-year revenue growth of 29.7%, mainly attributable to the construction activities on the company’s Colombia refining project and gas processing plants in PNG in the U.S.

Lummus Technologyrevenue for the quarter grew 17.6% year over year, driven by the continued strength of the petrochemical demand and the improving refining market.

CB&I Steel Plate Structures reported revenue growth of 13.9% year over year to $541 million, due to the completion of the company’s large projects in the Middle East and in the Caribbean. This was, however, offset by the ramp up in the Australian LNG projects.


Gross profit for the quarter spiked 34.8% year over year with gross margin expanding 120 basis points (bps) to 12.9% year over year. The increase in gross margin reflects the high level of license sales. Moreover, overhead and S&A expenses also declined. Operating margin in the quarter was 9.0% compared with 7.9% in the fourth quarter of 2011.

Balance Sheet & Cash Flow

Exiting the year, Chicago Bridge & Iron had a cash balance of $643 million and a debt of about $8 billion. In 2012, the company repurchased shares worth $123 million. Capital expenditures for the year were $72 million.

Chicago Bridge & Iron has a Zacks Rank #2 (Buy). The company’s competitors such as Dycom Industries (DY - Free Report) , Aecom Technology Corp. (ACM - Free Report) and Sterling Constructions (STRL - Free Report) also carry a Zacks Rank #2 (Buy).  

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