LONDON -- The shares of Balfour Beatty (LSE:BBY) rallied 3% to 223 pence this morning after the FTSE 250 mid-cap revealed its order book had grown 5% to £16 billion since the start of 2013.
Balfour Beatty, the global infrastructure and construction firm, shocked the market with a profit warning last month. The company confirmed there had been "no change in performance" since that update, which caused a 12% crash in Balfour's share price on April 29.
Balfour reported a 23% slump in first-quarter U.K. construction revenues, which the company blamed on fierce regional competition and a shortage of public-sector projects. Total revenue for global construction services declined 11%, with European rail operations also dragging on performance.
Commenting on its outlook for the year ahead, the company added:
As we progress through the year, our business is expected to benefit from the cost efficiency programs we have in place, a recovery in operational performance in U.K. construction and the ongoing implementation of strategic initiatives.
We remain confident that the strategy we have set out for the medium term will transform Balfour Beatty into an increasingly diverse and international business which is better positioned to benefit from structural growth in infrastructure markets with less cyclical characteristics.
With a market cap of £1.5 billion, Balfour Beatty's shares trade at nine times expected earnings. If the company can maintain its current dividend payout, Balfour's shares could offer an impressive dividend yield of 6.5%.
Of course, whether that valuation, today's update and the future prospects for the construction industry all combine to make shares of Balfour a buy remains your decision.
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