Fluor (FLR) Q2 Earnings Beat On Estimates, Guidance Cut
Zacks Investment Research | Aug 03, 2017 09:38PM ET
Fluor Corporation’s (NYSE:FLR) second-quarter 2017 earnings (excluding non-recurring costs) came in at 72 cents per share, crushing the Zacks Consensus Estimate of 59 cents by 22.0%.
However, on a reported basis, the company’s loss came in at 17 cents a share, in stark contrast to the earnings per share of 72 cents recorded in the year-ago quarter. An after-tax charge of $124 million, related to estimated cost increases on three gas-fired power projects, pushed the bottom line into the red. Also, a drab revenue performance added to Fluor’s woes.
Inside the Headlines
Second-quarter revenues came in at $4,716.1 million, falling short of the Zacks Consensus Estimate of $4,935 million by 4.4% and edging down 2.9% year over year. Two of the company’s four segments recorded revenue growth, which was more than offset by the decline recorded by the other two segments.
Revenues from the Energy, Chemicals and Mining segment declined 7.0% year over year to $2,304.0 million on account of reduced activity on Gulf Coast chemicals projects.
Industrial, Infrastructure and Power segment’s revenues inched up 1.6% year over year to $1,026.5 million. Sales at this segment largely benefited from increased project execution activities for several life sciences, advanced manufacturing and two nuclear projects for Westinghouse.
Revenues at the Government segment were up 13.1% year over year to $744.2 million, on the back of higher project execution activities for the Idaho Cleanup Project Core Contract (“Idaho Core Project”) and construction services projects.
Diversified Services revenues were down 9.9% to $641.4 million on a year-over-year basis. Completion of large Stork projects in Australia and delays in the seasonal upturn in European markets weighed down on the top-line performance of this segment.
For the reported quarter, Fluor’s new awards were down 50.3% to $3.2 billion on a year-over-year basis. Orders at the Industrial, Infrastructure and Power segment were $672 million, including the Southern Gateway highway project in Texas. The orders in the government business came in at $1,109 million, including task orders for LOGCAP IV in Afghanistan, additional funding for the Strategic Petroleum Reserve and the Idaho Cleanup Project Core Contract.
Orders at the Energy, Chemicals and Mining segment totaled $860 million. Orders at the Diversified Services segment grossed $554 million.
Consolidated backlog at the end of the quarter was $37.6 billion, down from $47.3 billion in the year-ago quarter. The backlog erosion is attributable to adjustment for a liquefied natural gas project in Canada, cancellation of a nuclear power plant project for Westinghouse and adjustment made to limit the contractual term of the Magnox nuclear decommissioning project.
Fluor Corporation Price, Consensus and EPS Surprise
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