Foster Wheeler AG (Nasdaq: FWLT) today reported income from continuing operations for the second quarter of 2014 of $85.6 million, or $0.85 per diluted share, compared with $68.3 million, or $0.68 per diluted share, in the second quarter of 2013.
Income from continuing operations in both quarterly periods was impacted by net asbestos-related gains and provisions, as detailed in an attached table. Excluding such items from both quarterly periods, adjusted income from continuing operations in the second quarter of 2014 was $86.8 million, or $0.86 per diluted share, compared with $54.6 million, or $0.54 per diluted share, in the year-ago quarter.
Results for the second quarter of 2014 include the impact of three additional items: a favorable $32.5 million, or $0.32 per diluted share, settlement in connection with the terms related to the expiration of a steam generator technology license; the benefit of $22.3 million, or $0.22 per diluted share, from the reversal of interest, penalties and tax provision as a result of settlements with non-U.S. tax authorities; and $3.9 million, or $0.03 per share, of third-party transaction costs in connection with the previously announced acquisition of Foster Wheeler by AMEC plc.
Excluding the impact of these three items and the asbestos provision, income from continuing operations in the second quarter of 2014 was $35.9 million, or $0.35 per diluted share.
For the first six months of 2014, income from continuing operations was $102.7 million, or $1.02 per diluted share, compared with $85.2 million, or $0.83 per diluted share, for the first six months of 2013.
The table shown presents data for continuing operations, both as reported and as adjusted to exclude asbestos-related gains and provisions. The company believes that quarterly averages provide meaningful comparative relevance for certain key metrics in light of the significant quarter-to-quarter variability that is inherent in the company’s financial results.
Foster Wheeler’s Chief Executive Officer, Kent Masters, said, “Our adjusted income from continuing operations in the second quarter of 2014 was more than double the average quarter of 2013, due largely to the technology license settlement and the tax settlements. Operationally, our Global Engineering and Construction (E&C) Group reported a sharp increase in scope revenues and EBITDA as compared to the average quarter of 2013, a very solid level of new orders and nearly $3 billion in scope backlog.”
Masters said, “We continue to expect that our Global E&C Group will report sharply higher scope revenues for the full-year 2014 as compared to the full-year 2013. However, in our Global Power Group, we now believe that scope revenue is likely to be down modestly for the full-year 2014 as compared to the full-year 2013. We believe the expected decline in GPG scope revenue is a reflection of the timing of new orders; nevertheless, we continue to see solid booking prospects in GPG for this year and beyond.”