Shaw Releases 3rd Quarter Earnings

| About: Shaw Group (SHAW)

Shaw Group Inc. (NYSE:SHAW) reported a loss of 24 cents per share for the 3rd Quarter of 2012 on revenue of $1.6 billion. Analysts expected Shaw to earn 58 cents per share on $1.5 billion in revenue. Last quarter, the company hit earnings targets right on the nose.

The company recently announced the sale of its Energy and Chemicals business for $300 million to Technip. The company reported that 31 cents of the 24 cent loss came from costs of this sale. In the 4th Quarter an associated $49 million gain from the sale will be booked. Also during this quarter, they reported a previously-announced loss of 19 cents a share for a settlement with GenOn.

The results are not that bad considering the revenue beat and future gains to be reported. Keep in mind that the company has already announced a 4th quarter gain of $49 million, or about 74 cents per share. So, holding through the next quarter may not be a bad idea.

Accumulate Shares

Since the open of the market, the stock has dropped over 2%. Now would be a good time to consider accumulating shares. Selling an out-of-the-money put option could give you additional income and potentially lock in a buying price below this current market price. The simple 50-day moving average is currently at about $27. Selling a $27 put option for an option premium of 40 cents would generate income of about 1.4% between now and July 20, 2012 expiration. Over 11 days, this is a 49% annualized return, if the stock simply trades above $27. If the put option is exercised, the basis in the stock will be reduced to about $26.60.

(Click to enlarge)

Also, reporting this week will be:

  • Marriott International Inc (NYSE:MAR) - July 11th
  • JPMorgan Chase & Co (NYSE:JPM) - July 12th
  • Wells Fargo & Co (NYSE:WFC) - July 12th

Yesterday, Alcoa (NYSE:AA) reported earnings of 6 cents a share and revenue of $6 billion, beating expectations on revenue.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

About this article:

Author payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500. Become a contributor »
Tagged: , Heavy Construction, Earnings
Problem with this article? Please tell us. Disagree with this article? .