Shaw Group reports sharply lower fiscal 3Q profit

BATON ROUGE, La. - Construction and engineering company Shaw Group Inc. said Thursday higher costs drove its fiscal third-quarter profit down 85 percent, missing Wall Street expectations. The company also lowered its full-year earnings forecast, sending shares down about 7 percent after-hours.

Net income fell to $7.9 million, or 9 cents per share, for the three months ended May 31, from $52 million, or 62 cents per share, in the year-earlier period. Excluding the company's Westinghouse division, results would have totaled 57 cents per share compared with 67 cents a year ago.

Revenue remained virtually unchanged at $1.8 billion.

Analysts had expected higher earnings of 60 cents per share on revenue of $1.8 billion, on average, according to a poll by Thomson Reuters. Wall Street estimates typically exclude one-time items.

The company said its third-quarter earnings had been hurt by higher costs on two fossil contracts within its Fossil & Nuclear segment.

"We continue to see momentum with our nuclear projects, and we are anticipating additional growth opportunities in our Environmental & Infrastructure segment," Shaw's chairman, president and CEO, J.M. Bernhard Jr., said in a statement.

Shaw's backlog of unfilled orders as of May 31 had reached a record $22.9 billion compared with $19 billion for the second quarter of fiscal 2009 and $15.6 billion at the end of fiscal 2008. Its cash balance stood at a record $1.3 billion.

Shaw now expects full-year earnings of about $2 per share, excluding the Westinghouse segment. That's down from and earlier forecast for earnings between $2.10 and $2.30 per share on revenue of $7.1 billion to $7.3 billion. Analysts expect much higher per-share earnings of $2.21 on revenue of $7.19 billion.

The company said results for its Westinghouse segment remain volatile due to non-cash foreign currency exchange losses that amounted to $20.2 million after-tax, in the third quarter.

Shares of Shaw fell $1.66, or 6.4 percent, to $24.50 in after-hours trading. During the regular session, the stock climbed $1.39, or 5.6 percent, to close at $26.16.

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