Engineering and construction company Shaw Group Inc. (SGR) said Wednesday that second quarter profit surged from last year, helped by foreign currency translation gains on Japanese Yen-denominated bonds. Excluding the Westinghouse segment, the company's quarterly earnings dropped from a year-ago, due to the charge on the one coal project in its Fossil & Nuclear segment. Following the news, the company's shares lost more than 10% in the after-hours trading.

The Baton Rouge, Louisiana-based company reported net income of $36.3 million or $0.43 per share for the second quarter, compared to net income of $4.0 million or $0.05 per share in the prior year quarter.

During the quarter, Shaw Group gained $30.9 million from foreign currency translation gains on Japanese Yen-denominated bonds, compared to a loss of $40.5 million last year.

Excluding the Westinghouse segment, net income fell to $18.9 million or $0.22 per share from $32.3 million or $0.38 per share in the year-ago quarter. The Westinghouse segment includes a non-cash foreign exchange translation gain of $18.8 million after tax.

On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.61 per share for the second quarter. Analysts' estimate typically excludes special items.

Earnings for the second quarter of fiscal year 2009 were negatively impacted by an after tax charge of $45.0 million or $0.53 per share, for projected construction labor cost increases in the estimated cost to complete a major coal-fired power generation project in the company's Fossil & Nuclear segment.

Second quarter revenues increased 1% to $1.7 billion from $1.6 billion in the same quarter of last year. Eleven analysts had a consensus revenue estimate of $1.75 billion for the second quarter.

The company's backlog of unfilled orders at February 28, 2009, was $19.0 billion, compared to $15.6 billion at the end of fiscal year 2008. About $5.4 billion or 28% of the current backlog is expected to be converted to revenues during the next 12 months.

In a separate release, Shaw Group said that the Nuclear Division of its Power Group and Westinghouse Electric Co. received full notice to proceed from Southern Nuclear, a subsidiary of Southern Company, on its engineering, procurement and construction contract for two Westinghouse AP1000 nuclear power units and related facilities.

Shaw and Westinghouse said they are currently providing engineering, design, procurement and project management services for the nuclear island for four AP1000 units in China, and at least 14 new AP1000 units are being planned by U.S. electric utilities, according to the Nuclear Regulatory Commission. Six of these units are now under contract with the Westinghouse/Shaw Consortium.

For the first half of fiscal 2008, Shaw Group posted a net loss of $3.6 million or $0.04 per share, compared to net income of $6.2 million or $0.07 per share in the previous year period.

Revenues for the year-to-date period increased to $3.6 billion from $3.4 billion in the preceding year period.

For fiscal year 2009, Shaw Group anticipates earnings, excluding the Westinghouse segment, of $2.10 to $2.30 per share, and revenue of $7.1 billion to $7.3 billion. Street currently expects earnings of $2.70 per share on revenue of $7.28 billion for the year.

Shaw Group closed Wednesday's regular trading session at $29.07, up 69 cents or 2.43%, on a volume of 3.27 million shares. However, in the after-hours, the shares lost $1.67 or 5.74%. The stock has been moving in a range of $11.47 - $66.61 for the past 52 weeks, with an average daily volume of about 2.82 million shares for the past three months.

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