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Fluor's (FLR) Q2 Earnings Lag Estimates, New Awards Strong

·4 min read

Fluor Corporation FLR reported lower-than-expected second-quarter 2022 results, wherein earnings and revenues lagged the Zacks Consensus Estimate. Notably, earnings and revenues missed the consensus mark for two consecutive quarters.

Following the results, shares of the company dropped 5.5%.

Elaborating on the future performance, David Constable, chief executive officer of Fluor, said, “Our new awards for the quarter demonstrate that clients are moving forward with capital spending plans in a challenging business environment,”

Fluor Corporation Price, Consensus and EPS Surprise

Fluor Corporation Price, Consensus and EPS Surprise
Fluor Corporation Price, Consensus and EPS Surprise

Fluor Corporation price-consensus-eps-surprise-chart | Fluor Corporation Quote

Inside the Headlines

Fluor reported adjusted earnings of 13 cents per share, missing the Zacks Consensus Estimate of 31 cents by 58.1%. The reported figure declined significantly from 32 cents a year ago.

Quarterly revenues of $3,299 million missed the consensus mark of $3,438 million by 4%. It decreased 10.5% from the year-ago level of $3,684 million. The downside was primarily caused by lower contribution from the Urban, Missions Solutions and Other segments.

Overall, the company’s segment profit came in at $108 million, reflecting an increase from $95 million a year ago. Segment margin of 3.3% improved from 2.6% in the year-ago period.

Fluor's total new awards for the quarter came in at $3.55 billion compared with $1.7 billion in the year-ago period. Consolidated backlog for the year came in at $19.52 billion, down from $20.8 billion at 2021-end.

Segmental Discussion

The company now reports results in four reportable segments as follows: Energy Solutions, Urban Solutions, Mission Solutions and Other.

Energy & Chemicals segment’s revenues grew 0.8% year over year to $1,330 million for the quarter. The segment reported a profit of $65 million, down from $109 million a year ago. New awards came in at $1,339 million in the quarter, up from $661 million in the second quarter of 2021. Backlog at quarter-end was $8.4 billion compared with $9.3 billion at 2021-end.

Revenues in the Urban Solutions segment totaled $1,005 million, down 16.9% on a year-over-year basis. Segment profit totaled $8 million versus loss of $68 million a year ago. New awards came in at $1,943 million for the quarter, up from $617 million a year ago. Backlog at quarter-end was $7.71 billion, up from $7.05 billion at 2021-end.

Revenues in the Mission Solutions segment totaled $547 million, down 22.6% on a year-over-year basis. The segment reported a profit of $28 million compared with $45 million a year ago. It booked new awards worth $52 million, down from $92 million a year ago. Backlog at quarter-end was $1.86 billion compared with $2.56 billion at 2021-end.

The Other segment — comprising NuScale — generated revenues of $417 million for the quarter versus $448 million in the year-ago period. This segment generated segment profit of $7 million versus $9 million a year ago. It booked new awards worth $216 million, down from $326 million a year ago. Backlog at quarter-end was $1.52 billion compared with $1.87 billion at 2021-end.

2022 Guidance

For 2022, Fluor now expects adjusted earnings per share in the range of $1.15-$1.35 versus $1.15-$1.40 earlier expected. The consensus mark for the same is currently pegged at $1.29 per share.

For 2022, FLR expects adjusted EBITDA in the range of $380 to $430 million.

Zacks Rank

Fluor currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Construction Releases

KBR, Inc. KBR reported strong results in second-quarter 2022. Quarterly earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.

KBR expects favorable market tailwinds, good bookings momentum, a strong first half, and work under a contract of more than 90% to deliver 2022 results. As of Jun 30, 2022, the total backlog (including award options) was $19.21 billion.

United Rentals, Inc. URI reported better-than-expected second-quarter 2022 results. Better fleet productivity on broad-based rental demand in construction and industrial verticals, higher total and rental revenues along with stronger pricing helped the company to boost profit.

URI also lifted its full-year guidance for total revenues, adjusted EBITDA and free cash flow, given broad-based end-market activity, contractor backlogs, customer sentiment and our visibility through the balance of the year.

Owens Corning OC reported solid second-quarter 2022 results. Its earnings and net sales surpassed their respective Zacks Consensus Estimate and increased on a year-over-year basis.

OC’s solid quarterly results were backed by strong demand across the markets served, structural improvements and strategic investments.


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