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Oct. 28, 2015, 3:50 PM
- Chicago Bridge & Iron (NYSE:CBI), which jumped after hours yesterday on news it was selling its nuclear construction business, is up 15.9% today as Credit Suisse says it's time to buy.
- Shares had fallen 22% in the past six months prior to the move.
- Credit Suisse has upgraded shares to Outperform, from Neutral, and raised its price target to $51 from $45. Shares had closed at $38.96, implying 31% upside.
- The Vogle and Summer construction projects had been a significant overhang on CB&I, says Credit Suisse's Jamie Cook, over concerns about fixed-price contracts with delays and overruns. A charge of $1-$1.2B is "large," says Cook, but "we see this as a positive catalyst as the charge is now known, over, and non-cash.”
- As previously noted, CB&I's deal with Westinghouse excludes a variety of CB&I's businesses, including fosil power generation, nuclear/industrial maintenance, the MOX project and Fed decommissioning.
- Previously: Westinghouse picks Fluor to manage nuclear builds; CB&I now up 10.4% (Oct. 27 2015)
- Previously: CB&I selling nuclear construction business to Westinghouse Electric (Oct. 27 2015)
Oct. 28, 2015, 9:12 AM
Oct. 27, 2015, 5:49 PM
- Chicago Bridge & Iron (CBI -3.8%) is selling all of its nuclear construction business to partner Westinghouse Electric (OTCPK:TOSYY -2.1%).
- The deal -- in which Westinghouse will fully take over facilities including South Carolina's V.C. Summer project, Georgia's Vogle project and various projects in China -- is expected to close in Q4 and includes CBI's nuclear integrated services.
- "For CB&I shareholders, it provides clarity and increased predictability from our growing backlog of work in markets that are more strategic to our future growth," says CEO Philip Asherman.
- CB&I expects to receive $229M in cash -- $161M on the substantial completion of nuclear projects and $68M on other milestones tied to CB&I's continuing supply contract. CB&I also expects a noncash charge after taxes of $1B-$1.2B from a loss on the transaction.
- The company also said in preliminary Q3 numbers it expects new awards of about $4B, revenues of $3.3B and positive operating cash flow. It reports earnings Nov. 5.
Jul. 7, 2015, 10:41 AM
Jun. 24, 2015, 3:19 PM
- Chicago Bridge & Iron (CBI -1.9%) is maintained with an Underperform rating and $30 price target by Macquarie, which sees news on nuclear flow continuing to be negative with the likelihood of further project delays.
- The firm notes that milestone activities related to Southern's (NYSE:SO) Vogtle nuclear plant have continued to slip, with only 23.7% of construction completed as of April; CBI CFO Michael Taff has said cost overruns would be borne by partner Westinghouse, but Macquarie thinks that is unlikely and CBI will be held partially responsible.
- While some delays may be related to reactor design amendments, the project schedule also is impacted by "required repair work on... legacy modules from Lake Charles," which the firm says "further confirms that CBI will be held partially responsible."
May 15, 2015, 11:57 AM
- CB&I (CBI +9.3%) soars following a Bloomberg report that Anadarko Petroleum (APC -0.1%) is poised to select it as the main contractor for construction of a potential $15B liquefied natural gas export project in Mozambique.
- The decision is a milestone for one of the few energy mega-projects around the world to move forward after crude prices collapsed last year; APC believes as much as 75T cf of natural gas may lie in the Area 1 prospect off Mozambique’s shores.
- Shares of Fluor (FLR -1.4%), which had been considered a contender for the project, are lower.
May 13, 2015, 3:59 PM
- CB&I (CBI +5.5%) is up sharply following news of a contract award with NextDecade LLC for front end engineering and design services related to the Rio Grande liquefied natural gas export project in Brownsville, Tex.
- Financial terms are not disclosed, but the scope of work includes all design and engineering activities required for the FERC permitting process, as well as for preparation for procurement of critical equipment prior to the final investment decision.
- The project includes plans for up to six liquefaction trains with a nominal output capacity of 4.5M metric tons/year of LNG.
May 8, 2015, 12:59 PM
- Weakness in CB&I (CBI -1.7%) is attributed to news that Toshiba (OTCPK:TOSBF -11.3%), the parent of the company's partner on a nuclear plant construction project, says it will launch an independent investigation committee to examine its accounting for some infrastructure-related projects.
- Toshiba had previously disclosed the formation of a special committee to conduct an internal investigation but has decided instead to have an independent committee further investigate the matter after finding improper accounting on some projects.
- Total capital costs for the nuclear plant project are estimated at $5.2B, or $6.8B including escalation and allowance for funds used during construction.
Mar. 13, 2015, 12:38 PM
- Today's weakness in CBI (CBI -4.6%) appears to be mostly related to news from Scana Corp. (SCG -1.7%) regarding delays and costs related to the construction of nuclear units in South Carolina that CBI is building.
- SCE&G, Scana’s electric utility, said last night that the cost for completing the new nuclear units at the Jenkinsville plant in South Carolina are likely to rise to $11B from its initial $9.8B price tag, and completion of the Unit 2 reactor will be pushed out three years to 2019.
- SCG says the delays and related cost increases are due to design and fabrication issues associated with the production of submodules used in construction of the units, and that it is negotiating with CBI and Westinghouse regarding the responsibility for delay costs.
- Earlier: CB&I's Ballschmiede out as CFO, to be replaced by Flowserve's Taff
Mar. 13, 2015, 10:28 AM
- CB&I (CBI -7.5%) appoints Michael Taff as CFO and executive VP, effective April 1, succeeding the retiring Ronald Ballschmiede.
- Taff has more than 30 years' experience of financial experience, and joins CBI from Flowserve (FLS -3.5%), where he served as senior VP and CFO, after previously serving as CFO of McDermott.
- Ballschmiede had been CBI's CFO and executive VP since 2006, and no reason was given for his retirement.
Feb. 25, 2015, 10:03 AM| Feb. 25, 2015, 10:03 AM | 25 Comments
Feb. 25, 2015, 9:24 AM
Feb. 24, 2015, 4:36 PM
- Chicago Bridge & Iron (NYSE:CBI): Q4 EPS of $1.47 beats by $0.03.
- Revenue of $3.37B (+12.3% Y/Y) misses by $60M.
- Shares +3.1%.
Jan. 30, 2015, 10:35 AM
- Southern Co. (SO -1.7%) says the firms building its new nuclear power plant in Georgia estimate the project will be delayed 18 months, potentially costing it $720M in new charges.
- Westinghouse Electric and Chicago Bridge & Iron (CBI -12.2%) expect the first reactor at Plant Vogtle will be complete in mid-2019, and the second reactor will come online in mid-2020, SO says in an SEC filing; SO already has been in litigation with the two companies over previous delays and cost increases.
- SO does not tally its total costs in the filing but says each month of a delay would cost $40M in new capital and financing charges; if the project stretched an additional 18 months, the total could grow to $720M.
- Deutsche Bank comments that the further delay to be particularly negative for CBI shares and potentially remain an overhang over the near term, given that it may take more than a year to resolve the dispute.
Jan. 27, 2015, 11:59 AM
- The value of new projects obtained by engineering and construction companies could drop 25%-30% in 2015 due to the sharp drop in oil prices, Deutsche Bank says as it downgrades two names in the group, Fluor (FLR -3.1%) and KBR (KBR -3.4%), to Hold from Buy.
- Many energy-related projects that had been boosting the results of E&C companies are no longer economically viable, and oil price volatility will make it difficult for companies to approve new projects even if they can generate acceptable returns at current oil prices, DB analyst Vishai Shah writes.
- Fluor and KBR have the greatest risk of reporting weaker than expected 2015 results, and their valuations are higher than average for the sector, Shah says; however, expectations are low for Chicago Bridge & Iron (CBI -1.7%), whose results could benefit from an acceleration in gas-fired power plant projects this year, the analyst says in maintaining a Buy rating on CBI.
Dec. 1, 2014, 3:48 PM
- Fluor (FLR -2.8%), Chicago Bridge (CBI -5.8%), Primoris Services (PRIM -13.6%) and Quanta Service (PWR -6.5%) are all downgraded to Hold from Buy at BB&T, which says the ongoing decline in oil prices could have a ripple effect throughout the energy infrastructure industry.
- Although shares of each company have been under pressure for several months, the firm says it would wait for the oil situation to stabilize before putting new money to work in any of the names.
Chicago Bridge & Iron Company provides conceptual design, technology, engineering, procurement, fabrication, construction and commissioning services to customers in the energy, petrochemical and natural resource industries.
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