Foster Wheeler Reports 27.9% Increase in 4Q08 Profit and Continues $59.72 Billion in Projects Worldwide

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Researched by Industrial Info Resources (Sugar Land, Texas)--Foster Wheeler AG (NASDAQ:FWLT) (Clinton, New Jersey) has announced a fourth-quarter 2008 net income of $99.9 million, up 27.9% compared with $78.1 million in the same quarter of 2007. For the full year, net income rose 33.7% to $526.6 million, compared with $393.9 million in 2007, creating a record high, the company stated. However, the amount of new orders book in the quarter declined in the company's Global Engineering and Construction (E&C) and Global Power groups.

In the Global E&C Group, new orders booked during the fourth quarter totaled $288 million, down from $604 million year over year. Chairman and CEO Raymond Milchovich said the decline is attributed to the fact that Foster Wheeler's clients have begun to take a more measured approach to project releases. "We see very large prospects that we are pursuing that are proceeding, but we see increased client tendency to release the jobs in phases," he said. The company is also seeing increased competition, as well as pressures in margins and pricing, he added.

The Global Power Group had $180 million in new orders booked for the quarter, down from $603 million in the same quarter in 2007. Milchovich said the decline in this group comes from a slowdown in the market. "The weakness in the global economy is clearly a factor; however, in addition, political and environmental sensitivity regarding solid fuel-fired boilers had escalated," he said. "The decline in natural gas prices increases the attractiveness of that fuel in relation to coal and other solid fuels, and other concerns, such as credit liquidity in the capital markets and plant costs, have also been factors."

One of the highlights for the year was the signing of a contract for a major refinery upgrade in Colombia with Ecopetrol (CLB:ECOPETROL) (Bogota, Colombia). As part of our International Industrial Database, Industrial Info is tracking 158 Foster Wheeler worth $59.72 billion. The database includes information on nine projects worth $1.61 billion that the company is working on in collaboration with Ecopetrol.

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