Economy Blog » Cramer Defends Foster Wheeler

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On Wednesday Foster Wheeler (FWLT) reported earnings of 85 cents a share well ahead of Wall Street estimates of 73 cents. Revenues came in at $1.8 billion, vs. estimates of $1.4 billion. The company said it currently has a backlog of $8.9 billion, which is almost equal to the company’s entire marketcap. Despite the great results, shares of FWLT fell 1.8% after CEO Ray Milchovich said the North American power business is weak, during the company’s conference call. Milchovich said he was surprised that Wall Street asked him question after question about the power division, when that business only makes up 9% of the company’s revenues. He said things look extremely robust for the FWLT’s engineering and construction divisions that serve markets like liquefied natural gas, refining, chemicals and the petrochemicals. Foster Wheeler gets 70% of its revenues from those markets. “The opportunity in the marketplace exceeds that which we and our competitors can serve,” Milchovich said. “The analysts were acting as if Foster Wheeler was just going to fall apart,” Cramer said. Cramer explained that isn’t the case and he is sticking with the name, which he owns for his charitable trust.
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