(Editors note: With the
first-quarter earnings season nearing its close, HP is
recapping the quarter for major market players in various
segments. Here are the results from
the global economy as a whole, the broad construction sector has tended to
lag other industries during the return of economic
growth in 2010 and 2011.
For the most part, the same can be said for construction and engineering firms
that service the energy industry.
While petrochemical and refining companies posted strong
quarters to begin 2011 amid rising crude oil prices, higher
margins and increasing shale gas supplies, results were much
more mixed for contractors.
In particular, the oil and gas segments of several
leading companies were among the weakest links.
Heres a rundown of how some of the top industry
players performed to open the 2011 year.
The most optimistic first-quarter earnings seemingly came from
France-based contractor Technip, which
reported a 9% rise in both net income and revenues.
Earnings were 104.3mn, up from 95.9mn in 2010,
while revenues jumped to 1.44 billion from 1.32
Technip CEO Thierry Pilenko referenced strong margins and a
robust order intake for his company.
Looking ahead, we remain confident in our ability to
expand our business even if events in North America postponed
the award of some expected projects, Pilenko said.
Activity has resumed slowly but steadily in the Gulf
of Mexico, with the first drilling permits now being
granted, he continued. Prospects for gas
development worldwide also look better than a year ago.
In general, we believe that the possible slowdown in
nuclear projects combined with political
uncertainties in major producing countries will encourage the
oil and gas operators to diversify their geographical
portfolio. This, combined with robust oil prices, could
stimulate major investments in challenging and technology-intensive environments.
But the news wasnt all positive for European contractors.
First-quarter earnings for Switzerland-based oil services
company Foster Wheeler AG dropped 68% to
$23mn, or 18 cents/share.
Revenues were up 10% to $1.04 billion, but below analyst
expectations of $1.11 billion.
Analysts had also forecast Foster Wheeler to earn 40
cents/share, more than double the amount it actually pulled in.
That sent shares of the companys stock sharply lower
following the earnings release.
Foster Wheeler cited lower profit margins and a reduced
volume of work during the quarter.
Moreover, it also booked fewer new orders in the quarter,
In the US, net income for engineering firm
Fluor rose 2%, to $139.7mn from $136.6mn.
Revenues were higher by 3%, jumping to $5.06 billion from
$4.92 billion a year earlier.
However, revenues were slightly under analyst expectations
of $5.59 billion. The companys earnings were share were
76 cents, in line with expectations.
Fluor was held down by its oil and gas segment, which saw
profits dip 33% to $62mn, down from $92mn in 2010. Revenues
dropped 19% to $1.7 billion.
Company officials said the results reflect the impact
of relative weakness in oil and gas markets over the last two
In what counted as its fiscal second-quarter, US-based
Jacobs Engineering Group also saw a slight
bump in overall net income, rising 3.6% to $80.3mn.
Revenues, though, fell 1.1% year on year to $2.56 billion.
Earnings per share were in line with analyst expectations at 63
Jacobs CEO Craig Martin cited a positive outlook going
forward, noting a sequential growth in earnings and backlog
from the prior quarter.
Several of our markets continue to improve and our
prospect list is growing, Martin said.
On the other hand, the company dropped the upper range of
its yearly fiscal guidance, falling to $2.40-$2.80/share from
Finally, for US-based The Shaw Group, net
income (excluding the Westinghouse segment) slipped 14% year on
year to $35mn as revenues fell to $1.4 billion from $1.6
Like Jacobs, the period to begin 2011 was actually
Shaws fiscal second quarter, which ended on February
Overall, our business segments performed at or better
than plan this quarter with the exception of energy and
chemicals, which was impacted by reduced earnings on a major petrochemical project, said
CEO J.M. Bernhard.
The company did not specify which project it was referring to.