Canaccord Genuity Morning Coffee on Foster Wheeler (FWLT): Wheeling in Yet Another Contract
Tweet
Share
E-mailGet Alerts FWLT Hot Sheet
Price: $27.52 --0%
Rating Summary:
4 Buy, 12 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
4 Buy, 12 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Join SI Premium – FREE
Canaccord Genuity Morning Coffee on Foster Wheeler (Nasdaq: FWLT): Wheeling in yet another contract.
Foster Wheeler bucked the broader trend on Thursday (flat this morning), rising after the company announced that its Global E&C Group has been awarded a contract by Petrobras for a Greenfield gas-to-chemicals complex in Espirito Santo State in Brazil. The contract value was not disclosed; however, Canaccord Genuity Infrastructure Analyst Yuri Lynk pegs the value in excess of $100 million, based on the scope of work. FW will provide basic engineering design, FEED, and technical assistance and training during the engineering, procurement, construction (EPC) phase through to successful completion of the plant performances tests. The complex, called Complexo Gás-Químico UFN-IV, is expected to produce in excess of one million tonnes per annum of ammonia and urea fertilizers, methanol, acetic acid, plus formic acid and melamine, helping to reduce Brazil's imports of these products. Impressively, Lynk notes that Q3/12 new Global E&C Group awards are shaping up to be the best since Q1/2009. This mega award, combined with the sizeable El Palito refinery expansion job awarded 19 July, supports his expectation of a significant ramp in 2H/12 backlog, revenue, and earnings. July Global E&C Group bookings, because of El Palito, were already close to new awards for all of Q2/12, which came in at $392 million. Including this award and the regular bookings that don’t get announced (multiple small jobs), Q3/12 Global E&C Group bookings could come in at over $700 million implying a 1.7:1 Q3/12 book-to-bill. There have only been two quarters since 2006 when new Global E&C Group awards exceeded $700 million. Lynk is bullish on the company based on improving visibility, attractive valuation, and leverage to strong oil/petrochem markets.
Foster Wheeler bucked the broader trend on Thursday (flat this morning), rising after the company announced that its Global E&C Group has been awarded a contract by Petrobras for a Greenfield gas-to-chemicals complex in Espirito Santo State in Brazil. The contract value was not disclosed; however, Canaccord Genuity Infrastructure Analyst Yuri Lynk pegs the value in excess of $100 million, based on the scope of work. FW will provide basic engineering design, FEED, and technical assistance and training during the engineering, procurement, construction (EPC) phase through to successful completion of the plant performances tests. The complex, called Complexo Gás-Químico UFN-IV, is expected to produce in excess of one million tonnes per annum of ammonia and urea fertilizers, methanol, acetic acid, plus formic acid and melamine, helping to reduce Brazil's imports of these products. Impressively, Lynk notes that Q3/12 new Global E&C Group awards are shaping up to be the best since Q1/2009. This mega award, combined with the sizeable El Palito refinery expansion job awarded 19 July, supports his expectation of a significant ramp in 2H/12 backlog, revenue, and earnings. July Global E&C Group bookings, because of El Palito, were already close to new awards for all of Q2/12, which came in at $392 million. Including this award and the regular bookings that don’t get announced (multiple small jobs), Q3/12 Global E&C Group bookings could come in at over $700 million implying a 1.7:1 Q3/12 book-to-bill. There have only been two quarters since 2006 when new Global E&C Group awards exceeded $700 million. Lynk is bullish on the company based on improving visibility, attractive valuation, and leverage to strong oil/petrochem markets.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
- Optimum Communications gets NYSE non-compliance notice over stock price
- UBS Reiterates Buy Rating on NVIDIA (NVDA), Expects Q2 Revenue Beat
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Earnings, Canaccord GenuitySign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
