Tuesday was a tough day for Foster Wheeler. The infrastructure company registered a “monumental earnings miss,” Cramer said, sending the stock down almost $12.
Chairman and CEO Ray Milchovich admitted his company’s fourth-quarter earnings were “materially off” what Wall Street expected, but said the setback hasn’t changed the outlook for 2008 “in any meaningful way from what we’ve announced before.” Foster Wheeler’s predictions are “substantially identical,” he said, to the guidance the company has offered for the last six months.
Milchovich urged investors to think longer term. Foster Wheeler’s had two record years in a row, the company’s sitting on $1 billion in cash, and earnings are up 40% since 2006. He said he fully expects the stock to bounce back when the company delivers the ’08 it promised.
Cramer seemed willing to stick with FWLT, though not without words of caution. The Mad Money host figures more downgrades are inevitable, saying the stock could drop to the high $50s. FWLT's at $67 and change now.
“I’m not walking away from it,” Cramer said. “I cannot blame anyone who does, though.”
Cramer's charitable trust owns Foster Wheeler.
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