Looking Ahead to Foster Wheeler 4Q


Foster Wheeler AG (FWLT) is set to report its fourth quarter 2012 results on Mar 1, 2013. Last quarter, it posted a +24.4% surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Foster Wheeler reported a robust third quarter compared to the average quarter of 2011. The company reported a 40% increase in adjusted net income and 57% surge in adjusted earnings per share. The strong performance was primarily driven by a record level of scope new orders in the Global E&C Group.

This segment received three big orders, which were booked and announced in the third quarter itself. Further, the Global E&C Group reported a 31% sequential increase in backlog.

Earnings Whispers?

Our proven model does not conclusively show that Foster Wheeler is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Positive Zacks ESP:  That is because the Most Accurate estimate stands at $0.45 while the Zacks Consensus Estimate is lower at $0.47. That is a difference of -4.26%.

Zacks #3 Rank (Hold): Foster’s Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks #3 Rank when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

  • Aecom Technology Corp. (ACM) with Earnings ESP of 1.92% and Zacks #2 Rank (Buy)
  • FLIR Systems Inc. (FLIR) with Earnings ESP of 5.88% and Zacks #2 Rank (Buy)
  • Quanta Services Inc. (PWR) with Earnings ESP of 3.33% and Zacks #3 Rank (Hold)
Read the Full Research Report on FWLT

Read the Full Research Report on FLIR

Read the Full Research Report on ACM

Read the Full Research Report on PWR

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