Fluor Reports Second Quarter Results
Aug. 02, 2018
IRVING, Texas--(BUSINESS WIRE)--Aug 2, 2018--Fluor Corporation (NYSE: FLR) today announced financial results for its second quarter ended June 30, 2018. Earnings attributable to Fluor for the second quarter were $115 million, or $0.81 per diluted share, compared to a net loss of $24 million, or $0.17 per diluted share a year ago. Consolidated segment profit for the quarter was $194 million, compared to $15 million a year ago. Second quarter revenue was $4.9 billion compared to $4.7 billion in the prior year.
New awards for the quarter were $5.4 billion, including $3.6 billion in Mining, Industrial, Infrastructure & Power, $742 million in Government, $513 million in Diversified Services, and $493 million in Energy & Chemicals. Consolidated ending backlog was $29.3 billion, up from $29.1 billion last quarter.
"This quarter we saw an increase in backlog for the first time since 2016, and we expect continued improvement in backlog as we move through the remainder of 2018," said David Seaton, Fluor chairman and chief executive officer. “For the second half of the year we will be focused on closing out legacy projects and deploying our cost-efficient integrated solutions model on future opportunities.”
Corporate G&A expense for the second quarter of 2018 was $18 million, compared to $47 million a year ago. Expenses for the quarter reflect a benefit of $25 million related to foreign currency exchange fluctuations. Fluor’s cash and marketable securities balance at the end of the second quarter was $1.8 billion.
The Company is maintaining its EPS guidance for 2018 at the previously announced range of $2.10 to $2.50 per diluted share.
Fluor’s Energy & Chemicals segment reported segment profit of $97 million, compared to $124 million in the second quarter of 2017. Results for the quarter include a pre-tax charge of $67 million for forecast revisions on a downstream project. Revenue for the segment was $2.0 billion compared to $2.2 billion a year ago. New awards for the segment totaled $493 million and ending backlog was $12.4 billion compared to $18 billion a year ago.
The Mining, Industrial, Infrastructure & Power segment reported a segment profit of $16 million, compared to a segment loss of $165 million in the second quarter of 2017. Results for the quarter include a pre-tax charge of $16 million for forecast revisions on a gas-fired power project. Revenue for the segment was $1.3 billion compared to $1.2 billion a year ago. New awards in the second quarter were $3.6 billion, including an iron ore replacement mine in Australia and the Los Angeles International Airport Automated People Mover project. Ending backlog for the segment was $12.4 billion, compared to $12.6 billion a year ago.
The Government segment reported segment profit of $51 million, compared to $20 million a year ago. Revenue for the quarter was $863 million, compared to $744 million a year ago. Second quarter new awards of $742 million include task orders for LOGCAP IV in Afghanistan. Ending backlog was $2.3 billion compared to $4.1 billion a year ago.
The Diversified Services segment reported segment profit of $29 million in the second quarter of 2018, compared to $36 million a year ago. Revenue for the quarter was $666 million compared to $641 million in the second quarter of 2017. New awards totaled $513 million for the quarter, and ending backlog was $2.2 billion compared to $2.9 billion a year ago.
Second Quarter Conference Call
Fluor will host a conference call at 5:30 p.m. Eastern time on Thursday, August 2, which will be webcast live on the Internet and can be accessed by logging onto investor.fluor.com. A supplemental slide presentation will be available shortly before the call begins. The webcast and presentation will be archived for 30 days following the call.
Non-GAAP Financial Measure
This press release contains a discussion of consolidated segment profit that would be deemed a non-GAAP financial measure under SEC rules. Segment profit is calculated as revenue less cost of revenue and earnings attributable to noncontrolling interests excluding: corporate general and administrative expense; interest expense; interest income; domestic and foreign income taxes; and other non-operating income and expense items. The company believes that consolidated segment profit provides a meaningful perspective on its business results as it is the aggregation of individual segment profit measures that the company utilizes to evaluate and manage its business performance. A reconciliation of this measure to earnings (loss) before taxes is included in the press release tables.
About Fluor Corporation
Founded in 1912, Fluor Corporation (NYSE: FLR) is a global engineering, procurement, fabrication, construction and maintenance company that transforms the world by building prosperity and empowering progress. Fluor serves its clients by designing, building and maintaining safe, well executed, capital-efficient projects around the world. With headquarters in Irving, Texas, Fluor ranks 153 on the Fortune 500 list with revenue of $19.5 billion in 2017 and has more than 56,000 employees worldwide. For more information, please visit www.fluor.com or follow Fluor on Facebook, Twitter, LinkedIn and YouTube.
Forward-Looking Statements: This release may contain forward-looking statements (including without limitation statements to the effect that the Company or its management “believes,” “expects,” is “positioned” or other similar expressions). These forward-looking statements, including statements relating to future growth, backlog, earnings and the outlook for the Company’s business are based on current management expectations and involve risks and uncertainties. Actual results may differ materially as a result of a number of factors, including, among other things, the cyclical nature of many of the markets the Company serves, including the Company’s Energy & Chemicals segment; the Company's failure to receive new contract awards; the Company’s failure to meet cost and schedule estimates; cost overruns, project delays or other problems arising from project execution activities; intense competition in the industries in which we operate; failure of our joint venture or other partners, suppliers or subcontractors to perform their obligations; failure to obtain favorable results in existing or future litigation or dispute resolution proceedings or claims; cyber-security breaches; foreign economic and political uncertainties; client cancellations of, or scope adjustments to, existing contracts; client delays or defaults in making payments; risks or uncertainties associated with events outside of our control, including weather conditions; the Company’s failure, or the failure of our agents or partners, to comply with laws; the potential impact of certain tax matters; possible information technology interruptions or inability to protect intellectual property; new or changing legal requirements, including those relating to environmental, health and safety matters; liabilities associated with the performance of nuclear services; foreign currency risks; the availability of credit and restrictions imposed by credit facilities, both for the Company and our clients, suppliers, subcontractors or other partners; failure to maintain safe worksites and international security risks; the inability to hire and retain qualified personnel; possible limitations on bonding or letter of credit capacity; risks or uncertainties associated with acquisitions, dispositions and investments; risks arising from the inability to successfully integrate acquired businesses; the use of estimates and assumptions in preparing our financial statements; and the Company’s ability to secure appropriate insurance. Caution must be exercised in relying on these and other forward-looking statements. Due to known and unknown risks, the Company’s results may differ materially from its expectations and projections.
Additional information concerning these and other factors can be found in the Company's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading “Item 1A. Risk Factors” in the Company's Form 10-K filed on February 20, 2018. Such filings are available either publicly or upon request from Fluor's Investor Relations Department: (469) 398-7222. The Company disclaims any intent or obligation other than as required by law to update its forward-looking statements in light of new information or future events.
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