Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Foster Wheeler (NASDAQ: FWLT) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Foster Wheeler has capitalized on the immense need for engineering work, especially in the booming energy industry. Yet as competitors make big strategic moves, Foster Wheeler finds itself looking smaller in comparison. Let's take an early look at what's been happening with Foster Wheeler over the past quarter and what we're likely to see in its quarterly report on Friday.
Stats on Foster Wheeler
|
Analyst EPS Estimate |
$0.46 |
|
Change From Year-Ago EPS |
18% |
|
Revenue Estimate |
$977 million |
|
Change From Year-Ago Revenue |
(13.5%) |
|
Earnings Beats in Past 4 Quarters |
2 |
Source: Yahoo! Finance.
Will Foster Wheeler engineer success this quarter?
Analysts have barely budged on their estimates for Foster Wheeler, cutting back on both their fourth-quarter and their full-year 2013 calls by just a penny per share. The stock has fared a bit better, though, rising about 4% since late November.
The engineering industry has gone through a lot of changes lately, with Chicago Bridge & Iron having recently completed its acquisition of Shaw Group to become a larger player in the industry. With much less revenue than the new CB&I and industry leader Fluor (FLR 5.76%), Foster Wheeler now faces the challenge of dealing with huge rivals that put it at a competitive disadvantage.
But Foster Wheeler has continued getting plenty of work. Earlier this month, it signed a deal with a subsidiary of Royal Dutch Shell (NYSE: RDS-A) to support Shell's operations, with engineering for processes including distillation, hydrocracking, and sulfur dioxide scrubbing. It also got a five-month contract to work with the British Geological Survey to study flexible power generation systems, including hydrogen storage salt caverns and carbon dioxide storage.
Moreover, an upsurge in interest in nuclear power plants should provide another tailwind for Foster Wheeler. Even though Germany and Japan are scaling back reliance on nuclear power in light of Japan's Fukushima disaster, countries from China and India to the United Arab Emirates are looking to boost their nuclear production capacity, and that's boosting business prospects both for reactor-part supplier General Electric (GE 1.05%) and nuclear engineering specialists, which include both Foster Wheeler and Fluor.
In its quarterly report, watch for Foster Wheeler to discuss in more depth its long-term strategy for pursuing future business. Despite competitive pressures, the boom in the industry should leave more than enough prospects for Foster Wheeler to flourish as long as good times last for energy companies.
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