July 14, 2009 - URS Corp. (URS-NYSE) provides engineering, construction, and technical services to the power, infrastructure, Federal, and industrial and commercial market sectors in the United States and internationally. Its services for power sector include the plan, design, engineer, construct, retrofit, and maintainenance of a range of power-generating facilities; and the systems that transmit and distribute electricity, as well as the development and installation of clean air technologies that reduce emissions.

Its services for the Federal sector consists of program management; planning, design, and engineering; systems engineering and technical assistance to construction and construction management; operations and maintenance; and decommissioning and closure.

URS Corporation's services for industrial and commercial sector include front-end studies, engineering and process design, procurement, construction and construction management, facility management, and operations and maintenance, as well as due diligence, permitting, compliance, environmental management, pollution control, health and safety, waste management, and hazardous waste remediation.

It has a joint venture with Jacobs Engineering Group Inc. to provide general design support and construction management services to the U.S. Army Corps of Engineers. The company was formerly known as Broadview Research Corporation and changed its name to URS Corporation in 1976. URS Corporation was founded in 1904 and is headquartered in San Francisco, California.

For a company that does $10 billion a year in revenues, these sums should add substantially to the top and bottom lines. And the bottom line has been doing well in these difficult times. In 2006, profits were $2.16 a share. Then they went to $2.36, followed by $2.66 last year. This year, the consensus from 16 analysts following the stock is for $3.02, then for 2010, $3.34. Over the last 5 years, earnings per share grew by an annual average of 7.86%. For the next 5, expectations are for annual growth to be 11.33%. For the June quarter, look for 66 cents a share, down from 72 cents a share in the same period last year. For the 3rd quarter, expect 73 cents a share, a little below the 79 cents made last year in the same quarter.

For the first quarter of 2008, URS reported revenues up 12% compared to the first period of 2007 while net income jumped by 53% to $75.5 million. The secret to URS's success has been diversification and the fact that it doesn't rely on any one source, offering a wide range of engineering, construction and technical services. Furthermore no one commodity price affects results significantly. While most industries are suffering during this economic slowdown, URS is actually growing.

Watch for earnings and sales volatility with URS. Instead of a steady, ever increasing flow of revenues, the company is paid on project milestones and incentives, making for erratic payments as well as earnings. If a deadline or milestone is missed, payments are delayed.

URS took a beating, along with the rest of the market, late last year when the stock dropped a little below $20 a share, after reaching an all-time high of $64 in late 2007. The stock rallied strongly since then. Investors are beginning to see the potential that the new stimulus program represents for URS.

More numbers: Market Cap is $3.81 billion. Forward P/E is 13.7. Price to Book is 1.2. Operating margin for the last 12 months was 4.21% while Profit margin was 2.38%. Revenues for the last 12 months were $10.35 billion. Total cash is $387.42 million. Cash per share is $4.66. Total debt is $1.11 billion. Current ratio is 1.69. Book Value is $45.27. Total shares outstanding are 83.18 million. Insiders own 3.43% while institutions have 90%. Beta is 1.5. There is no dividend.

URS should have several good years ahead, especially if the funding is distributed as currently planned. But be aware of the possibility of volatility in revenues and profits due to the nature of URS's payments for projects. The high beta of 1.5 also suggests that investors move in and out of this stock rather quickly.

Company Web site: www.urscorp.com

- Ted Allrich