Fluor Corp.’s 1985 Loss Reaches $633.3 Million

Fluor Corp. said Wednesday that it lost $633.3 million during its fiscal year ended Oct. 31., largely as a result of $400 million in asset write-downs. The 1985 loss, which was about $33 million more than Fluor had projected in October, was a reversal from net earnings of $1 million in 1984.

The loss resulted from “year-end refinements, including a somewhat larger tax provision than originally estimated,” said Rick Maslin, a spokesman for the Irvine-based engineering, mining and construction company.

Revenue for the year was $4.16 billion, down slightly from revenue of $4.3 billion in the previous 12 months.

A Fluor spokesman blamed that decline on a long-running strike at some of the company’s West Virginia coal mines, lower minerals prices and stiffer competition for the company’s engineering and construction units.

With the bulk of the company’s write-downs taken during its fiscal fourth quarter, Fluor’s loss during the three months ended Oct. 31 was $570 million.

In the corresponding period a year earlier, it posted a net loss of $21.8 million. Fourth-quarter revenue was $1.1 billion, up 10% from 1984.

Along with the write-downs, Fluor’s loss was caused by heavy penalties related to the early retirement of long-term debt. Fluor’s long-term debt at Oct. 31 totaled $259 million, down from $724 million a year earlier.

But shareholders’ equity dipped 41% to $1 billion over the 12 months.

In its drive to “set the stage for a return to profitability,” Fluor has restructured itself, selling off assets and operations that it considers unrelated to its primary businesses of engineering, construction and mining.

In July, Fluor completed the sale of its 162-acre corporate headquarters site to Trammell Crow Co. of Dallas for $340 million.

In October, it agreed to sell the remaining operations of Denver-based Fluor Oil & Gas to a subsidiary of Houston Industries Inc. for about $190 million--almost 25% below book value.

Fluor said it also is seeking to sell minority interests in all of the operations belonging to its St. Joe Minerals subsidiary.

Fluor hopes to raise some $30 million by spinning off St. Joe’s gold mining operations into a new company to be called St. Joe Gold, of which about 6.7% would be sold to the public.

Despite the massive 1985 loss, Fluor Chairman David S. Tappan said in a prepared statement that “Fluor’s financial condition remains strong” and that the company should still “deliver gradual improvement in performance,” even if markets remain soft.

Deborah Thielsch, a securities analyst who follows Fluor for First Boston Corp. of New York, said: “I would say that last year they made a lot of progress and are in a better position now than they were year ago. But they still have a lot of work ahead of them.”