CB&I Gets Russian Contract - Analyst Blog

Chicago Bridge & Iron Company(CBI) announced that CB&I Lummus has won a contract for providing front-end engineering, design and consultancy services to the Shtokman LNG (liqufied natual gas) storage and loading facility in the Murmansk region of the Russian Federation.

CB&I's project scope includes concept design and development of the LNG storage and handling facility, including 160,000 cubic meter containment LNG storage tanks and the associated piping and loading facilities.

Chicago Bridge & Iron Company is a worldwide provider of fully integrated specialty engineering, procurement and construction (EPC) services and related licensed processes, primarily used by the energy markets for large-scale storage and refining of liquids and gases. We believe the stock will continue to outperform over the near term. The company's improving outlook and strong fundamentals only strengthen its appeal.

CBI designs, procures, fabricates and builds facilities and major equipment for power industry customers around the globe.  Its expertise encompasses both traditional and emerging technologies, including electric, cogeneration nuclear, LNG, hydroelectric and wind power.

The business depends on major construction projects from clients, the unpredictable timing of which may result in significant fluctuations in cash flow and earnings based on the gap in timing between the awarding of the project and payment under the contract.

Revenue and earnings may be adversely affected by a reduced level of activity in the hydrocarbon industry, especially in light of the global financial and economic crisis.

The company's improving outlook and strong fundamentals strengthen our belief that the stock will continue to perform well over the near term. A major competitor of Chicago Bridge & Iron Company is Matrix Service Co. (MTRX).

Chicago Bridge & Iron Company N.V. is a worldwide provider of fully-integrated specialty engineering, procurement and construction services and related licensed processes, primarily used by energy markets for large-scale storage and refining of liquids and gases. The company divides its operations into four broad market sectors: Liquefied Natural Gas (LNG), Energy Processes, Steel Plate Structures, and Lummus Technologies.

We currently maintain our 'Neutral' recommendation on Chicago Bridge & Iron Company.

 
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