Foster Wheeler Ltd. (NASDAQ:
FWLT) is scheduled to report its Q1 2010 results after the market closes on May 4, 2010.Earnings in 2010 are likely to be impacted by more competitively price work and lower volumes than originally expected. The latter part of the year is expected to show improvements in both, new order flows and earnings based mostly on the assumption that the global economy revives and capital expenditure on new capacity responds.
Foster Wheeler Corporation is essentially a holding company which owns the stock of various subsidiary companies.
As for Q4 2009, Foster Wheeler reported net income of $65.1 million, or $0.51 per diluted share, compared with $99.9 million, or $0.75 per diluted share, in theQ4 of 2008. Net income in both quarterly periods was impacted by asbestos-related items. Q4 2009 consolidated EBITDA was $108.1 million, compared with $105.1 million in the Q4 of 2008. Even though EBITDA for each of the two groups was below the record-high average quarter of 2008, the operating and commercial performance of both E&C and GPG continued to be excellent. Furthermore, each group continued to do a very good job of capturing available market opportunities. In addition, the company's cash position continued its sequential-quarter build, reaching $1 billion at the end of the Q4 of 2009.
Analysts' estimates for Q1 2010 range from a low of $0.45 to a high of $0.63, compared to a consensus estimate of $0.55, with number of estimates being 17and the co-efficient variance of 10.78. Although thelack of new orders and backlog build in Q4'09 or early 2010 implies lower EBITDA margin estimates for Global E&C for 2010 as well as lower revenue, outlook still suggests that 2010 orders are merely delayed but not cancelled. On April 7, 2010, Foster Wheeler AG announced that its Global Power Groupwas awarded a contract by GDF SUEZ, one of the leading energy providers in the world, for the design, supply and erection of a 190 MWe (gross megawatt electric) 100% biomass-fired circulating fluidized-bed (CFB) boiler island for the Polaniec Power Station in Poland. The contract value, which was not revealed,will be included in the company's bookings for Q1 of 2010. Again, on April 8, 2010, the company announced that a subsidiary of its Global Power Group was awarded a contract for the design and supply of two axial deaerating surface condensers for the Samsun Power Plant in Turkey and the contract value is expected to be included in the Q1 bookings. On April 13, 2010, FWLT announced that a subsidiary of its Global Engineering and Construction Group wasawarded contracts by PETROM S.A. for investments,which form part of PETROM's Petrobrazi Modernization Project, a major refinery modernization project being implemented at the Petrobrazi Refinery in Ploesti, Romania. Q1 2010 is expected to be a strong quarter due to the aforementioned contracts and a delayed but not cancelled order log.
The stock closed at $31.21 on April 20, 2010 and analysts' recommend a strong buy with an average price target of $35.
