JP Morgan Comments on Shaw Group FQ3

Shaw Group SHAW reported F3Q EPS of -$0.86, “well below our estimate of +$0.76 (Street at +$0.69),” JP Morgan reports. “Results reflected a significant charge ($0.88/share) due to subcontractor execution issues on an E&C project, and a $0.37/share impairment charge on a loan to NINA's South Texas Project, which we believe was widely expected (NRG Energy NRG walked away from the project in April). “Charges aside, SHAW missed our revenue forecast by ~10% (including an outsize miss in E&C), implying a sizable miss on an underlying basis. The tax rate was in line with our forecast, while aggressive share repurchase activity benefited EPS by $0.05 vs. our estimate. OCF of $71mm was below our $114mm forecast.” Shaw Group closed Tuesday at $23.91.