URS Suffers Loss on Goodwill Charge - Analyst Blog

URS Corp. (URS) reported fourth-quarter fiscal 2011 earnings per share of 37 cents compared with 75 cents in fourth-quarter 2010. The Zacks Consensus Estimate was way up higher at 98 cents.

During the quarter, the company recorded a goodwill impairment charge of 43 cents per share. Earnings for the quarter also include a non-cash, after-tax charge of $0.02 per share, related to the retirement of the company’s prior credit facility and a $0.07 per share, after-tax charge related to the restructuring of URS’ international operations in Europe. Excluding these charges, earnings per share would have been 89 cents in the quarter.

For 2011, the company reported a loss per share of $6.03 compared with earnings per share of $3.54 in 2010. The Zacks Consensus Estimate was earnings of $3.63.

Excluding 2 cents per share related to the retirement of the company’s prior credit facility, 7 cents per share of after-tax charge related to the restructuring of URS’ international operations in Europe and 1 cent per share of after-tax charge related to acquisition expenses, earnings per share for the year were $3.53.

Total Revenue

Total revenue in the quarter was $2.39 billion compared with $2.38 billion in the prior-year quarter.

For 2011, total revenue was $9.55 billion compared with $9.18 billion a year ago. URS Corp.’s backlog was $14.3 billion at the end of 2011 compared with $16.6 billion at the end of 2010.

Segment Result

Infrastructure and Environment revenue in the quarter was $943.8 million compared with $895.1 million in the prior-year quarter. Federal Services revenue was $726.5 million compared with $647.8 million a year ago. Energy and Construction revenue was $722.9 million compared with $837.2 million in the prior-year period.

Income and Expenses

Operating income in the quarter was $114.1 million compared with $122.4 million in the prior-year quarter. General and administrative expenses were $19.6 million compared with $15.9 million a year ago.

Balance Sheet and Cash Flow

Cash and cash equivalents were $436.0 million at the end of the year compared with $573.8 million at the end of 2010. Long-term debt was $737.0 million compared with $641.3 million and shareowners equity was $3.48 billion compared with $4.20 billion at the end of 2010.

Outlook

The company expects its 2012 revenue to be in the range of $9.9 billion to $10.1 billion and EPS in the band of $3.95 and $4.05.

URS Corp. was originally incorporated in California on May 1, 1957 as Broadview Research Corporation. On May 18, 1976, it was re-incorporated in Delaware under the name URS Corporation. The name “URS Corporation” was formally adopted on February 21, 1990. URS Corp. provides engineering, construction and technical services. As such, it offers a broad range of program management, planning, design, engineering, construction and construction management, operations and maintenance, and decommissioning and closure services to public agencies and private sector clients globally. It is also a major U.S. federal government contractor in the areas of systems engineering and technical assistance, and operations and maintenance. Major competitors of URS are AECOM Technology Corporation (ACM), Fluor Corporation (FLR) and KBR Inc. (KBR).

We currently maintain our Neutral rating on URS Corp. with a Zacks #2 Rank (short-term Buy recommendation) over the next one-to-three months.

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URS CORP (URS): Free Stock Analysis Report

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