Fluor Inks Air Force Deal for Ascension Auxiliary Airfield
Fluor Corporation’s FLR Fluor AMEC II, LLC unit has clinched a contract from the Air Force Installation Contracting Agency to repair the Ascension Island Auxiliary Airfield runway. This task order, under the Air Force Contract Augmentation Program IV (AFCAP IV), spans for up to 28 months and is valued at approximately $170 million.
The U.S. Air Force created the AFCAP IV program in order to accomplish the U.S. Department of Defense's global mission during contingency events. AFCAP provides the Air Force and other government agencies with additional capabilities to support the logistic requirements of its deployed forces through the use of civilian contractors. Fluor has upheld its position in the AFCAP IV program since 2015, and has been delivering cost-effective solutions in some of the most remote and difficult locations in the world.
New Awards to Revive Fluor’s Performance
Shares of the company have declined 45.6% in the past year against the Zacks Engineering - R And D Services industry’s 19.9% rally. Notably, the company’s revenues during the first nine months of 2019 declined 5.7% year over year, mainly due to lower contribution from Energy & Chemicals, Infrastructure & Power, as well as Diversified Services businesses.
Nonetheless, strong end-market prospects, solid backlog level and a good business portfolio mix are expected to drive growth in the future. At the end of the third quarter, consolidated backlog was $30.3 billion, up from $30 billion recorded in the comparable year-ago period.
Fluor boasts an impressive record of contract wins. Earlier this month, Heartland Canada Partners — a 50/50 partnership between Fluor and Kiewit Construction Services ULC — received an EPC contract from Canada Kuwait Petrochemical Corporation. In December 2019, Stork — which is part of Fluor’s Diversified Services business — has received a contract from HES Hartel Tank Terminal — a project of HES International — to support the construction of the new tank terminal. Management is optimistic about the continuation of this trend of winning contracts in the upcoming days, which will likely drive its top line.
Zacks Rank
Fluor — which shares space with Gates Industrial Corporation plc GTES, Quanta Services, Inc. PWR and AECOM ACM in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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