Shakespeare may have thought that it was better to try and fail than to never try at all, but Wall Street is seldom so forgiving. While EnergySolutions (NYSE:ES) has a lot going for it as a very rare pure play on nuclear energy services, the company is going through a difficult adjustment. After trying to compete as a tier-1 player, the company looks to be retrenching, and near-term earnings performance is not looking robust. Nevertheless, patient investors may want to keep an eye on this name as there may be more power to the business than near-term results suggest. (For background reading, check out The Biggest Nuclear Operators In The United States.)
A Tough End to the Year
Due in part to some accounting readjustments, the fourth quarter of this fiscal year was not very strong for EnergySolutions. Revenue was effectively flat,
gross profit was down 15%, and
EBITDA fell 6%. None of that is likely to impress analysts, even on an adjusted basis.
Looking around on a division basis does not really help the picture much. The company's international business, its largest component, was basically flat on a revenue basis, but operating income fell more than 20% on lower fees from a major contract. Elsewhere, the commercial services business saw revenue jump, but operating income swung to a loss anyway.
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