Shares of Chicago Bridge & Iron (CBI - Analyst Report) rose about 4.7% after the company reported third-quarter 2014 results on Oct 23. Adjusted earnings of $1.51 per share surpassed the Zacks Consensus Estimate of $1.39 per share by 8.63%. The bottom line also marked an increase of 34.8% from $1.12 a share earned in the prior-year quarter. On a GAAP basis, earnings per share increased about 37% year over year to $1.48.

Results were driven by key factors including growing demand for energy across the globe, diligent operational execution coupled with increased focus on safety.

Total Revenue & Contracts

Revenues for the quarter rose 13% year over year to $3,380.7 million. The rise was attributable to strong performance of the company’s Engineering, Construction and Maintenance segment, which came on the back of increased demand for energy infrastructure, especially in the LNG, gas processing and oil and gas markets throughout the world. However, revenues lagged the Zacks Consensus Estimate of $3,440 million.

New contracts for the third quarter totaled $3.0 billion, driven by strength in oil and gas projects in North America and technology demand in Asia Pacific and the Middle East. Fabrication activity also remained robust in the Middle East region. Year to date, CBI has won new contracts worth $13 million. At the end of the third quarter, the backlog level stood at $30.7 billion.

Segment Revenues

The Engineering, Construction and Maintenance segment’s revenues grew 24.2% year over year to $2,370.3 million. The increase was driven by a significant improvement in the end markets. The segment received new awards worth $1,761.7 million in the quarter.

Fabrication Services reported third-quarter 2014 revenues of $631.5 million, reflecting a decline of 10.7% year over year. However, new award wins for the segment totaled nearly $479 million in the quarter.

Technology segment’s revenues also decreased 7% to $145 million. Nevertheless, the segment won over $387.5 million worth new contracts in the quarter.

The Environmental Solutions segment sales climbed 5.7% year over year to about $234 million. The segment received new contracts worth $347.8 million.

Margin

Gross profit for the quarter improved 24.2% year over to $393.2 million while gross margin increased 100 basis points (bps) year over year to 11.6%. Operating income was $286.1 million, up 41.5 % year over year. Operating margin also increased 170 bps to 8.5%.

Other Financial Details

CBI’s current assets amounted to $3,393.8 million as on Sep 30, 2014, a marginal increase from $3,389.6 million of Dec 31, 2014. The company had shareholders' equity of nearly $2,866.8 million, along with long-term debt of about $1,591.2 million.

Cash flow from operating activities for the nine-month period ended Sep 30, 2014 was negative $349.3 million, compared with negative $194 million recorded in the prior-year period.

Looking Ahead

The company remains optimistic about its strong fundamentals. However, the ongoing geopolitical uncertainty and declining oil prices remains a concern for the near term.

Zacks Rank

Chicago Bridge & Iron currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include CLARCOR Inc. (CLC - Snapshot Report), Granite Construction Incorporated (GVA - Snapshot Report) and Quanta Services, Inc. (PWR - Analyst Report). All three stocks carry a Zacks Rank #2 (Buy).