NEW YORK (AP) -- Shares of engineering and construction company Fluor Corp. was one of the top gaining stocks in the Standard & Poor's 500 Friday, as investors applauded the company's record order book and improved first quarter results.
THE SPARK: The Irving, Texas, company said Thursday that itss first-quarter profit rose 10.9 percent, driven by growth on contract work for oil and gas companies.
The company also announced a contract from Teck to handle engineering, buying, and construction management for a project at the Highland Valley Copper Mill in British Columbia. The deal adds $397 million to Fluor's backlog. Flour's backlog during the first three months of the year rose 14 percent to a record $42.5 billion.
THE ANALYSIS: BMO Capital Markets analyst Avram Fisher noted that while the first-quarter results were within Wall Street's expectations, "the growth in backlog remains astounding."
Michael Dudas, an analyst with Sterne Agee, said that shares are cheap considering the amount of growth possible through these new contracts. He said he continues to expect diverse growth in contracts for projects spanning the Canadian oil sands, U.S. petrochemicals and power markets, Middle East oil and gas and mining and minerals in South America and Australia. He expects Fluor will continue to grow contracts through "strong industry credibility and market positioning."
Both analysts held onto their earnings estimates for this year and next — mostly above what the company is expecting.
SHARE ACTION: Shares gained 2.6 percent, or $1.42, in afternoon trading to hit $57.96. The stock is in the middle of its year range, $44.16 to $73.18.