Zacks_Analysts' Blog : Chicago Bridge & Iron Beats Estimates - Analyst Blog

Chicago Bridge & Iron Company (CBI) reported earnings per share from continuing operations of 63 cents per share compared to the Zacks Consensus Estimate of 55 cents for the fourth quarter of 2010.

Revenues for the quarter were $947.9 million. CBI Steel Plate Structures contributed to 42% of the revenues while CBI Lummus accounted for 49% of revenues and the remaining was due to Lummus Technology.

New orders booked in the quarter were $992 million. Order contribution from CBI Lummus was highest at 48% while that from CBI Steel Plate Structures was 37% and the rest was from Lummus Technology. Backlog at year-end was $6.9 billion, more than 80% of which is sourced from outside the U.S.

Gross margin for the quarter was 13.7% compared to 12.3% in the prior-year quarter. Operating income for the quarter was 9% of revenues compared to 7.4 % in the year-ago period. Net income was 6.76% of revenues for the fourth quarter of 2010 compared to 4.1% in the year-go period.

Cash flow from operations was positive at $288 million. Cash and equivalents were $1.2 billion with long-term debt at $0.3 billion and shareholder’s equity at $1 billion.

Chicago Bridge & Iron Company is a worldwide provider of fully integrated specialty engineering, procurement and construction (EPC) services and related licensed processes, primarily used by the energy markets for large-scale storage and refining of liquids and gases. We believe the stock will continue to outperform over the near term. The company's improving outlook and strong fundamentals only strengthen its appeal.

CBI designs, procures, fabricates and builds facilities and major equipment for power industry customers around the globe.  Its expertise encompasses both traditional and emerging technologies, including electric, cogeneration nuclear, LNG, hydroelectric and wind power.

The business depends on major construction projects from clients, the unpredictable timing of which may result in significant fluctuations in cash flow and earnings due to timing between the award of the project and payment under the contract.

CB&I constructs some of the world's largest energy infrastructure projects, providing a full spectrum of EPC solutions and proven process technologies. Matrix Service Company (MTRX) is a major competitor.

We currently have a Neutral recommendation on Chicago Bridge & Iron Company.