Foster Wheeler reported net income for the second quarter of 2011 of $63.3 million, or $0.52 per diluted share, compared with $58.9 million, or $0.46 per diluted share, in the second quarter of 2010.
Net income in both quarterly periods was impacted by asbestos-related provisions as detailed in an attached table. Excluding such items from both quarterly periods, net income in the second quarter of 2011 was $65.3 million, or $0.53 per diluted share, compared with $61.2 million, or $0.48 per diluted share, in the year-ago quarter.
For the first six months of 2011, net income was $86.3 million, or $0.70 per diluted share, compared with $130.9 million, or $1.02 per diluted share, for the first six months of 2010.
Foster Wheeler's Interim Chief Executive Officer, Umberto della Sala, said, "The company reported a 17% increase in net income in the second quarter of 2011, relative to the average quarter of 2010. The results were attributable to the very strong performance of the company's Global Power Group, which reported sharp increases in scope revenue and scope EBITDA relative to the average quarter of 2010."
In addition, net income for the second quarter of 2011 was aided by the continued benefit of a favorable effective tax rate.
Global Engineering and Construction (E&C) Group
In commenting on the market outlook for the company's two business units, Mr. della Sala said, "Markets seem to be improving for both of our business groups, although the pace of that improvement is slightly better in the power sector. Even so, all of our end markets remain competitive."
He added, "We are raising our full-year EBITDA margin guidance for the Global Power Group (GPG) to 17%-19%. GPG is having a strong year, and we further expect the group's 2011 revenues to be sharply higher than 2010. We are closely tracking firm prospects in a number of regions. However, the timing of award decisions is uncertain, and some of these prospects could slip into 2012, which would likely result in scope backlog at the end of 2011 being roughly comparable with year-end 2010."
Mr. della Sala continued, "In our Global E&C Group, we are maintaining full-year EBITDA margin guidance of 13%-15%, but we still expect to see quarterly volatility, with the third-quarter margin likely lower than the second quarter. We expect scope revenues to trend upward in the second half of 2011, but we now believe that full-year scope revenues will likely be essentially flat as compared to full-year 2010. Based on the expected timing of awards, we expect scope backlog to show growth in 2011 from year-end 2010 levels."
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