(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 petrochemical and refining firms.)
For 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 billion.
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, officials said.
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 years.
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 cents/share.
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 $2.40-$2.85/share.
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 billion.
Like Jacobs, the period to begin 2011 was actually Shaws fiscal second quarter, which ended on February 28.
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.