We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Aegion Wins Renewable Diesel Project at California Refinery
Read MoreHide Full Article
Aegion Corporation’s subsidiary Schultz Industrial Services (“Schultz”) has won a mechanical construction services contract to build the first commercial-scale renewable diesel manufacturing facility in California.
Per the deal, Schultz — part of the Energy Services segment — will provide project management services, and install piping and associated equipment throughout the refinery to convert an existing processing unit to produce renewable diesel fuel that complies with low-carbon fuel standards. This time and materials-based contract, worth $8 million, will commence later this month and is expected to be completed by first-quarter 2021.
Charles R. Gordon, Aegion’s president and CEO, said, “With significant compliance and investment projects planned for California refiners over the coming years, Schultz is well positioned to serve this growing market.”
Aegion’s Energy Services Prospects
Aegion’s Energy Services segment has long-term relationships with oil refinery and industrial customers in the West Coast, and plans to leverage those relationships to expand mechanical maintenance, specialty, electrical and instrumentation services, small capital construction, as well as shutdown and turnaround maintenance activities. Notably, Schultz has been the lead outsourced maintenance provider at the California refinery over the past seven years.
The Energy Services segment delivered the fourth consecutive year of double-digit adjusted earnings growth in first-quarter 2020. Demand for core maintenance services (accounting for more than 70% of segment revenues) reached record highs in the last few quarters (barring first-quarter 2020). Approximately 85% of revenues were generated from maintenance and rehabilitation of the existing infrastructure, which diminishes its dependence on new construction activity and reduces risks in cyclical markets.
The segment’s backlog (excluding the impact of exited or to-be-exited businesses) came in at $215.2 million as of Mar 31, 2020.
So far this year, shares of the company have declined 34.6% against the industry’s 1% growth. Aegion has been incurring larger-than-expected losses from Corrosion Protection due to COVID-19-related project delays, mainly in the Coatings Services business. Nonetheless, improving economic backdrop and contract wins will help the company regain momentum.
In May, an affiliate of the Energy Services segment — Brinderson L.P. — inked a contract to provide onsite mechanical and electrical services for oil major ExxonMobil (XOM - Free Report) . Aegion will act as the primary services contractor for ExxonMobil at the Billings, Montana, refinery. This award represents the second major oil refinery maintenance agreement of Brinderson in the Rocky Mountain region in 2020, after it recently finished its transition in Salt Lake City.
Zacks Rank
Aegion — which share space with Armstrong World Industries, Inc. (AWI - Free Report) and Gibraltar Industries, Inc. (ROCK - Free Report) in the same industry — currently has a Zacks Rank #5 (Strong Sell).
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Aegion Wins Renewable Diesel Project at California Refinery
Aegion Corporation’s subsidiary Schultz Industrial Services (“Schultz”) has won a mechanical construction services contract to build the first commercial-scale renewable diesel manufacturing facility in California.
.jpg)
Per the deal, Schultz — part of the Energy Services segment — will provide project management services, and install piping and associated equipment throughout the refinery to convert an existing processing unit to produce renewable diesel fuel that complies with low-carbon fuel standards. This time and materials-based contract, worth $8 million, will commence later this month and is expected to be completed by first-quarter 2021.
Charles R. Gordon, Aegion’s president and CEO, said, “With significant compliance and investment projects planned for California refiners over the coming years, Schultz is well positioned to serve this growing market.”
Aegion’s Energy Services Prospects
Aegion’s Energy Services segment has long-term relationships with oil refinery and industrial customers in the West Coast, and plans to leverage those relationships to expand mechanical maintenance, specialty, electrical and instrumentation services, small capital construction, as well as shutdown and turnaround maintenance activities. Notably, Schultz has been the lead outsourced maintenance provider at the California refinery over the past seven years.
The Energy Services segment delivered the fourth consecutive year of double-digit adjusted earnings growth in first-quarter 2020. Demand for core maintenance services (accounting for more than 70% of segment revenues) reached record highs in the last few quarters (barring first-quarter 2020). Approximately 85% of revenues were generated from maintenance and rehabilitation of the existing infrastructure, which diminishes its dependence on new construction activity and reduces risks in cyclical markets.
The segment’s backlog (excluding the impact of exited or to-be-exited businesses) came in at $215.2 million as of Mar 31, 2020.
So far this year, shares of the company have declined 34.6% against the industry’s 1% growth. Aegion has been incurring larger-than-expected losses from Corrosion Protection due to COVID-19-related project delays, mainly in the Coatings Services business. Nonetheless, improving economic backdrop and contract wins will help the company regain momentum.
In May, an affiliate of the Energy Services segment — Brinderson L.P. — inked a contract to provide onsite mechanical and electrical services for oil major ExxonMobil (XOM - Free Report) . Aegion will act as the primary services contractor for ExxonMobil at the Billings, Montana, refinery. This award represents the second major oil refinery maintenance agreement of Brinderson in the Rocky Mountain region in 2020, after it recently finished its transition in Salt Lake City.
Zacks Rank
Aegion — which share space with Armstrong World Industries, Inc. (AWI - Free Report) and Gibraltar Industries, Inc. (ROCK - Free Report) in the same industry — currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>