Shaw Group declares Q3 fiscal 2006 earnings guidance
10 Jul '06
5 min read
Our operating results in the Energy & Chemicals unit were lower than expected primarily because of adjustments to our cost estimates during the completion and performance testing phase on a domestic EPC power plant project which, along with the unfavorable ruling in the AES Wolf Hollow claim, offset our otherwise overall good results." Mr. Bernhard continued, "We are pleased to report that in a positive ruling recently received in the Harquahala project arbitration, we were awarded $37 million by the arbitration panel. We expect to receive the funds in the fourth quarter."
Mr. Bernhard concluded, "Lastly, this quarter's record backlog of $8.1 billion was our fourth consecutive record and reflects the strong market conditions we are experiencing across all our business lines, especially the energy and chemicals markets. We expect our revenues to continue to be strong as revenues from these new major projects begin to be reflected in our operations. We have begun field work on several of these new major projects including two coal-fired power plants, several large FGD scrubber projects and several chemicals projects in the Middle East."
During the preparation of the financial statements for the third quarter 2006, management concluded that two errors occurred in the preparation of Shaw's second quarter financial statements which require restatement of the second quarter results. One error resulted from a clerical error in the computation of the amount ofrevenue to recognize on a contract accounted for under the percentage-of-completion method.
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