Fluor's (FLR) Unit Wins NNSA Contract Extension From DOE
Fluor Marine Propulsion, LLC, a special purpose entity of Fluor Corporation FLR, received a National Nuclear Security Administration (NNSA) contract extension for five years (through 2028) from the U.S. Department of Energy.
Consistent with the original contract, won in 2018, Fluor’s Mission Solutions business will recognize all fees earned with this new extension as equity income.
FLR’s subsidiary will support the Naval Nuclear Propulsion Program, jointly owned by the Department of Energy’s NNSA and the Department of the Navy. Fluor’s experts will help in the management and operation of the Naval Nuclear Laboratory (NNL), with primary facilities in New York, Pennsylvania and Idaho.
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Shares of this Zacks Rank #1 (Strong Buy) company inched up 0.57% in the after-hours trading session and 20.7% in the past three months against the Zacks Engineering - R and D Services industry’s decline of 6.8%.
Fluor’s Growth Prospect
Fluor’s market diversity remains a key strength that helps the company mitigate the cyclicality of the markets in which it operates. Its strategy of maintaining a good business portfolio mix permits it to focus on more stable business markets and capitalize on developing cyclical markets at suitable times. Fluor has supported the nation’s security for nearly 80 years.
The company has been focusing on its new strategy, “Building a Better Future,” within which it has outlined four strategic priorities for driving shareholder value. First, the company intends to drive growth across 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.
Second, Fluor aims to pursue contracts with fair and balanced commercial terms that reward value with a bias toward reimbursable contracts. The company has decided that it will not bid competitive fixed-price EPC in the Energy & Chemicals segment and will be more selective in the Infrastructure segment. This marks a significant shift from the prior management team’s high-risk, high-margin strategy.
Third, it intends to reinforce financial discipline by maintaining a solid balance sheet and generating predictable cash flow and earnings.
Lastly, foster a high-performance culture with purpose by advancing efforts toward diversity, equity and inclusion, as well as promoting social progress and sustainability.
Key Picks
Some other top-ranked stocks in the same space are:
Quanta Services, Inc. PWR remains uniquely positioned to capitalize on megatrends and opportunities to lead the energy transition and enable technological development, with initiatives such as electric vehicle charging infrastructure and undergrounding of electrical infrastructure gaining momentum. More demand for infrastructure solutions that help support customers' energy-transition initiatives and modernization will continue to provide multi-year growth opportunities for Quanta.
PWR currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 4%, on average. The Zacks Consensus Estimate for its 2023 sales and EPS indicates growth of 15.9% and 11.7%, respectively, from the previous year’s reported levels.
You can see the complete list of today’s Zacks #1 Rank stocks here.
TopBuild Corp. BLD sports a Zacks Rank of #2. It has a trailing four-quarter earnings surprise of 14.1%, on average. Shares of BLD have surged 39% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and EPS indicates gains of 3.3% and 8.4%, respectively, from the year-ago period’s levels.
EMCOR Group, Inc. EME carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 17.2%, on average. Shares of EME have risen 69.2% in the past year.
The Zacks Consensus Estimate for EME’s 2023 sales and EPS suggests growth of 11.3% and 35.4%, respectively, from the year-ago period’s levels.
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