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Shaw Group Eases Quarterly Losses, but Improves Gross Profit

Out of Baton Rouge, La., Tuesday, The Shaw Group (SHAW) announced more income losses in its quarterly report for its fiscal quarter that ended May 31. However, compared to the same period a year ago, the next loss is more than 400 percent less. On the other hand, gross profit was up more than 500 percent from the same period one year earlier. Still, though, it doesn’t come across as great news – but it certainly could be worse.

In its report, Shaw listed its gross revenue for the spring 2012 quarter at $1.6 billion, up from $1.5 billion in the same quarter of 2011 and beat analysts’ estimates by $70 million. The gross profit figure for 2012 was listed at $56.5 million, which is five times more than the $10.1 million announced in 2011. However, the net loss for the company in 2012 was $16 million – though that was signifcantly lower than the $70 million quoted a year earlier. The earnings per share this time around was minus-24 cents, compared to a minus-89 in 2011.

J.M. Bernhard Jr., president and CEO of Shaw, said in a press release, “As we progress with the completion of our planned divestiture of the Energy & Chemicals segment, we are experiencing volatility in our third quarter earnings and expect this to continue into the fourth quarter. However, most of our operating units performed well in the quarter, with our Plant Services and Environmental & Infrastructure segments continuing to perform exceptionally well. Additionally, the ramp up of our nuclear projects has been slower than planned due to the delays in the combined licenses for the U.S. projects. Those projects are now moving forward, and we expect them to continue to have a positive impact on our Power and Fabrication & Manufacturing segments.”

Shaw is in agreement to sell nearly all of its Energy & Chemicals segment to Technip for about $300 million, a deal to e finalized in the fourth quarter of 2012, and that should stabilize Shaw’s numbers overall. That particular segment of Shaw’s holdings lost $33 million in the most recent quarter, but anticipates a future gain of $49 million once the sale of the segment is completed.

Once the volatile energy segment is disposed of, this overall report just might be a good thing for funds like Dmitry Balyasny’s Balyasny Asset Management and Robert Pitts’ Steadfast Capital Management, which were invested a combined $165 million in Shaw at the end of March, both of which increased their stakes during that previous quarter. Should the Technip deal be completed by the end of this quarter, the investment may turn into a positive one.