(Editors note: With the
second-quarter earnings season at its close, HP is recapping
the quarter for major market players in various segments. Here
are the results from
The benefits of
high profits for oil and gas producers have yet to trickle down
to the global construction sector, with spending curtailed by
doubts over the stability of the global economic recovery.
The uneven performance for contractors, particularly in oil
and gas segments, continues a trend also seenin the first quarter.
Many top energy firms have reported record
profits from rising crude oil prices, higher margins and
increasing shale gas supplies.
But political unrest in the Middle East, coupled with
volatile markets in developed nations such as the US, has major
companies taking a conservative view on growth projects.
Heres a rundown of how some of the top construction industry players
performed in the second quarter of 2011.
Foster Wheeler said its profit climbed nearly 8% on
strong results from its power plant services segment and a more
favorable tax rate.
The Switzerland-based company reported earnings of $63.3
million, up from $58.9 million a year earlier.
Sales increased 18% to $1.18 billion.
Foster Wheelers global power group registered an 81%
jump in revenue over the second quarter, based primarily on
However, that was partly offset by a drop in orders and
quarterly revenues for the companys engineering and construction group.
Foster Wheeler was decidedly pessimistic about engineering
and construction activity, predicting a likely fall in third
quarter profit margins and flat full-year revenues when
compared with 2010.
Elsewhere in Europe, Technip
posted a recurring operating profit of 175.6 million, up
from 160.5 million in the year-earlier period.
Sales for the France-based contractor jumped 14.5% to
Technip credited its earnings to higher spending from
upstream companies. The firm specializes in building oil rigs
Technip was more optimistic than most firms following its
second quarter, raising its full-year target for subsea profit
margin to 17%, up from a prior estimate of 15%.
In the US, net income for engineering firm
Fluor was $165 million, up slightly from $157
million a year earlier.
Revenues rose 17% to $6.0 billion, up from $5.2 billion in
2010. The company credited gains to substantial
growth in the industrial and infrastructure segment.
Like Foster Wheeler, however, Fluors oil and gas unit
reported earnings of $69 million, down 30% from $98 million a
Revenues rose 12% amid new project awards, but the
segments profit still dropped, reflecting a shift
in the current product mix toward lower margin construction activities.
The drop in income came despite an EPCm deal for the Dow
Chemical/Saudi Aramco petrochemicals project in Saudi
In other segments, profits fell year on year within power
and government. Meanwhile, earnings rose 30% in global
services, driven by growth in equipment and staffing business
In what counted as its fiscal third quarter, US-based
Jacobs Engineering Group posted net earnings
of $90.7 million, up slightly from $79.3 million a year
Given our steady backlog and solid prospect list, our
outlook remains positive, said CEO Craig L. Martin.
Our performance in the quarter was good, particularly in
The companys backlog at the end of the quarter totaled
$14.0 billion, rising slightly from $13.5 billion at the same
time a year ago.
Since last October, Jacobs earnings are $236.7
million, up from $169.0 million in the first three quarters of
However, revenues were roughly flat year on year, at $7.7
billion in each period.
The most negative earnings news came for US-based
Shaw Group, which said that problems with a
subcontractor on an energy and chemicals project helped trigger
a $70 million loss in its fiscal third quarter.
The company did not specify which project, only noting that
subcontractor execution issues reduced earnings by
$112.8 million on a pretax basis, and $68.9 million after
Shaw swung to the $70 million loss in its fiscal third
quarter after posting a net income of $68.2 million in the same
quarter a year ago.
Revenue dropped nearly 17% to $1.49 billion, down from $1.79
billion in the 2010 third quarter.
Shaw said it is pursuing recovery on partially
manufactured equipment and other assets related to the project. The amount of any
recovery remains uncertain, the company said.
Chief executive J.M. Bernhard Jr. called the quarter
extremely challenging and disappointing.