Though first-quarter results weren't entirely a great start, the good news outweighed the bad. Revenue rose 35% in the quarter, with results boosted by work on LNG projects in the U.K. helping significantly. The company also boosted its backlog from the end of fiscal 2005; it currently stands at about $3.4 billion, more than a year's worth of revenue at current run rates.
The gross margin fared worse, falling more than a full point. Operating income also dropped 20%, partly because of the costs associated with stock compensation and the investigation of the accounting troubles. Order levels were also lower this quarter, as new business fell 38%. It should be noted, though, that this tends to be a somewhat lumpy metric; the timing of large orders can make comparisons look really good or really bad from one quarter to the next.
Accounting irregularities are generally a valid reason to steer clear of companies, but I think CB&I has done a noteworthy job of quickly cleaning house. I couldn't comment on the impact it had on rank-and-file employees, but I'd consider the departure of three major executives a significant reaction to the problem.
A strong underlying market will also help heal the wounds a little faster. After all, while CB&I is a bit more specialized than average, plenty of large engineering and construction firms like Fluor
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Fool contributor Stephen Simpson but has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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