Fluor (FLR) Joins Carbfix for Carbon Capture & Storage Solutions
Fluor Corporation FLR, an engineering and construction company, has announced a memorandum of understanding with Carbfix, a leading carbon dioxide (CO2) mineral storage operator. The partnership aims to tackle the challenges of climate change by focusing on decarbonizing industries with high greenhouse gas emissions, such as steel, aluminum and cement.
Fluor will contribute its proprietary Econamine FG Plus carbon-capture technology, along with its extensive expertise in engineering, procurement and construction. Meanwhile, Carbfix will bring its groundbreaking technology, which involves dissolving CO2 in water and injecting it into porous basaltic rock formations. This natural process allows CO2 to transform into stable carbonate minerals within two years.
The collaboration between Fluor and Carbfix will enable them to offer comprehensive CO2 reduction solutions to clients seeking end-to-end carbon capture and storage. Additionally, the MOU opens opportunities for the companies to explore other CO2 removal projects, including direct air capture and bioenergy carbon capture and storage.
Carbfix, having employed its CO2-to-stone method in Iceland for more than a decade, is already capturing and mineralizing a significant portion of CO2 emissions from the country's largest geothermal power plant. It intends to increase this rate to an impressive 95% by 2025.
Fluor's partnership with Carbfix represents a strategic move that harnesses the strengths of both companies to address the urgent need for CO2 reduction in challenging industries. With Fluor's advanced technology and engineering capabilities complemented by Carbfix's innovative mineralization process, the collaboration holds promise for advancing sustainable solutions and making substantial progress in the fight against climate change.
Focus on Decarbonization Efforts
Fluor’s market diversity remains a key strength that helps it mitigate the cyclicality of the markets in which it operates. The company intends to drive growth across diverse portfolios by enhancing markets outside the traditional oil and gas sector, including energy transition, advanced technology and life sciences, high-demand metals, infrastructure and mission solutions. The long-term prospects of FLR also remain strong, with existing growth opportunities in renewable energy, gas-fired combined cycle generation and air emission compliance projects for existing coal-fired power plants.
The Energy Solutions segment mainly offers services to energy transition markets, including asset decarbonization, carbon capture, renewable fuels and other low-carbon energy sources. In the last reported quarter, the Energy Solutions segment’s revenues grew 37.3% year over year to $1,612 million.
Further, the segment’s margin expanded 90 basis points to 5.5% from a year ago. New awards came in at $712 million in the quarter, up from $682 million in the first quarter of 2022. The backlog at the quarter end was $8.56 billion.
Share Price Performance
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Shares of FLR have increased 18% in the past year compared with the Zacks Engineering - R and D Services industry’s growth of 36.9%. The company’s underlying performance continues to be impacted by a few remaining legacy projects.
However, its Building a Better Future initiative — focusing on expanding markets outside the traditional oil and gas sector in fair and balanced commercial deals, financial discipline and high-performing business culture — will drive growth.
Zacks Rank & Key Picks
FLR currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the Construction sector are Eagle Materials Inc. EXP, Dycom Industries, Inc. DY and Vulcan Materials Company VMC.
Eagle Materials currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EXP delivered a trailing four-quarter earnings surprise of 6.5%, on average. Shares of the company have rallied 59.5% in the past year. The Zacks Consensus Estimate for Eagle Materials’ fiscal 2024 sales and EPS indicates growth of 2% and 8.4%, respectively, from the previous year’s levels.
Dycom currently sports a Zacks Rank of 1. DY delivered a trailing four-quarter earnings surprise of 153.7%, on average. Shares of the company have risen 15.4% in the past year.
The Zacks Consensus Estimate for DY’s fiscal 2024 sales and EPS indicates growth of 8.3% and 41%, respectively, from the previous year’s levels.
Vulcan Materials currently carries a Zacks Rank #2 (Buy). VMC has a trailing four-quarter earnings surprise of 7.1%, on average. Shares of the company have rallied 48.8% in the past year.
The Zacks Consensus Estimate for Vulcan Materials’ 2023 sales and EPS indicates growth of 5.9% and 26.2%, respectively, from the previous year’s levels.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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