Shares of Foster Wheeler AG (FWLT
were down over 19% in afternoon trading Tuesday, despite a strong fiscal fourth quarter report that beat analyst expectations.
The company reported fiscal fourth quarter net income of $99.9 million, or 75 cents per share, compared with $78.1 million, or 54 cents per share, in the year-ago period. Excluding special items, Foster Wheeler saw net income of $137.2 million, or $1.03 per share, compared with $80.6 million, or 56 cents per share, in the fourth quarter of 2007.
Revenue for the quarter was up 12% to $1.64 billion, compared with $1.47 billion in the year-ago period.
On average, Wall Street analysts expected earnings of 95 cents per share on revenue of $1.78 billion.
As for the full-year 2008 results, the company saw net income of $526.6 million, or $3.68 per share, up 33% from $393.9 million, or $2.72 per share, in 2007. Excluding special items, net income in 2008 was $533.2 million, or $3.73 per share, up from $387.7 million, or $2.68 per share, in 2007. Revenue for the year was $6.85 billion, up 34% from $5.11 billion in the previous year.
On average, analysts expected full-year earnings of $3.71 per share.
Foster Wheeler was cautious about 2009, however, saying that orders have slowed as of late. The company said it expects lower earnings in 2009 than it saw in 2008, partly due to challenges facing its power business segment.
The Bottom Line
Shares of FWLT are way off of their December, 2007 highs of $77 a share. The stock has technical support in the $11 price range. If that fails to hold, we could possibly test the $7 mark. If the stock can rebound, we see overhead resistance around the $27 level. We do not currently rate this non-dividend paying stock, but it is a key name we watch in the engineering space.
Foster Wheeler AG (FWLT) does not currently pay a dividend.
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