CB&I reports Q2 (Jun) results, suspends dividend, pursuing a sale of its Technology business, initiates comprehensive cost reduction program(16.33 -0.09)
- Reports Q2 (Jun) GAAP loss of $(3.02) per share from cont ops. Appears to not be comparable to the Capital IQ Consensus of $0.91; revenues fell 40.6% year/year to $1.28 bln, this also appears to not be comparable to the $2.49 bln Capital IQ Consensus. See below for explanation as to why the results appear to not be comparable to consensus.
- Note: Results are for continuing operations, which consist of CB&I's Engineering & Construction (E&C), Fabrication Services and Technology businesses. The results of its former Capital Services business have been classified as a discontinued operation for all periods presented. CB&I also announced in a separate news release today that it is initiating the process to sell its Technology business.
- "Although our [Q2] results are disappointing, we are taking decisive actions to improve our operating performance and strengthen the company's financial position...We have initiated a comprehensive cost reduction program and suspended our dividend. We are injecting additional rigor and discipline into our execution and risk management processes, further strengthening the integration between our E&C and Fabrication Services operating groups, and accelerating the implementation of innovative practices and technologies."
- Co also announces it is pursuing a sale of its Technology business, which the co believes will unlock significant value for stakeholders. Co plans to use the proceeds from the sale to significantly enhance CB&I's financial strength and flexibility by eliminating the majority of its debt and reinvesting in its E&C and Fabrication Services businesses.
- Co envisions a bright future for CB&I as a highly focused company with tightly integrated EPC and fabrication capabilities serving the LNG, petrochemical, refining and gas power generation markets.
- Guidance: Co expects 2H17 revenue to be between $3.7 and $4.0 billion and EPS of $1.00 to $1.25.
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