URS Q2 Profit Surges 31% - Update

(RTTNews) - Construction and engineering services provider URS Corp. (URS), Tuesday reported a 31 percent surge in second-quarter profit, despite lower revenues as costs and income tax expense dropped. Earnings for the quarter came in ahead of expectations, while revenue missed Wall Street estimates.

San Francisco, California-based URS' second-quarter profit rose to $88 million or $1.27 per share from $67 million or $0.91 per share last year. On average, 15 analysts polled by Thomson Reuters expected a profit of $0.74 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the second quarter dropped to $2.56 billion from $2.79 billion in the second quarter last year. Analysts had a consensus revenue estimate of $2.69 billion for the quarter.

Commenting on the results, Chief Executive Martin Koffel said, "While revenues decreased from last year's second quarter, partially as a result of the continued wind-down of our successful chemical demilitarization contracts, we are seeing positive long-term trends and increasing bidding opportunities across all of our key market sectors. We remain confident in our outlook for the year"

Segment-wise, federal sector revenues declined to $826 million from $953 million last year, while infrastructure and industrial sectors remained "essentially unchanged" at $488 million. Oil and gas revenue dropped to $697 million from $797 million last year, while power sector revenue slipped to $253 million from $261 million a year ago.

Income tax expense for the quarter dropped to $13 million from $39 million last year.

URS provides engineering, construction, and technical services to government agencies and private companies across various industries.

Last month, the company agreed to be acquired by peer Aecom Technology Corp. (ACM) for about $4 billion in cash and stock. Today, the company said that the Federal Trade Commission has granted URS and AECOM early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The company expects to close the deal in October 2014.

URS closed Tuesday's trading at $58.29, down $0.04 or 0.07%, on the NYSE.