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Fluor Loss Again Offset With Sale of Its Headquarters

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Times Staff Writer

Although the final numbers show a $1.1-million profit for the period, Fluor Corp. officials acknowledged Tuesday that the giant engineering company would have posted a loss of $26 million in its fiscal 1986 third quarter without the gain from the sale of its Irvine headquarters complex.

Officials said, however, that the $27-million profit booked for the third quarter from the sale last year of its 162-acre corporate complex in Irvine was the last time Fluor would be able to report a gain on the transaction.

For the third quarter last year, Fluor reported a net profit of $8.6 million--after using a $55.7-million gain from the sale of its offices and land to offset what otherwise would have been a loss of $47.1 million.

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Fluor’s third-quarter revenues were $1.1 billion, edging above $975 million for the same quarter a year ago.

Including proceeds of the headquarters sale, Fluor showed a net loss of $3.9 million for the first nine months of its fiscal 1986, compared with a year-earlier net loss of $63.5 million. In addition to its real estate gains, Fluor booked a $24.1-million gain from the sale of 10% of its St. Joe Gold subsidiary during the current fiscal year.

Nine-month revenues totaled $3.6 billion, compared to $3 billion for the year-ago period.

‘Restructuring Actions’

Fluor has been able to cut its operating losses, said Chairman David Tappan, “primarily from restructuring actions begun 18 months ago.”

Because of the dearth of large-scale energy projects that were formerly Fluor’s bread and butter, the company has redirected its engineering and construction activities into general industrial areas.

As another sign of change at Fluor, the company announced Tuesday that Dean K. Allen, executive vice president and member of the Fluor board of directors, has voluntarily resigned from the company “to pursue other opportunities.”

Allen, who was employed at Fluor for 24 years, managed the company’s engineering and construction activities until last January, when he was promoted to executive vice president.

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In that position, he said Tuesday, he was in charge of Fluor’s venture group and an equipment-leasing company, and also served as a corporate strategic planner. In addition, he said, most of the corporate staff reported to him.

New Unit Combines Operations

Allen said that his duties as executive vice president will be divided among Tappan, Fluor President John A. Wright, and Leslie G. McCraw Jr. McCraw late last month was made head of a new organization, Fluor Daniel Engineering & Construction Group, which combines all of Fluor’s engineering and most of its construction operations worldwide.

McCraw was formerly president of Daniel International Corp., an open-shop engineering and construction operation based in Greenville, S.C., that Fluor purchased in 1977. In recent years, as energy-related work has declined, Daniel’s general industrial workload has eclipsed that of Fluor Engineers and Constructors.

In a previous interview, McCraw said that Daniel had remained profitable during the steep downturn in Fluor’s construction business.

Fluor Constructors, the Fluor unit that does jobs requiring unionized construction workers, has “experienced significant losses in operations due to cost overruns” this fiscal year, said Fluor spokesman Rick Maslin.

Maslin said Fluor’s engineering and construction operations also were “negatively impacted” this year by their need to lease space in buildings that Fluor formerly owned.

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New Orders Keeping Pace

Fluor reported that its engineering and construction divisions took $550 million in new orders in the third quarter of this year, about the same as for the third quarter of fiscal 1985. Their work backlog, however, declined to $4.6 billion from $5 billion in the third quarter of fiscal 1985.

The corporation’s natural resources group reported improvement in its operations through the fist nine months of the current fiscal year, the company said, because of increases in the prices of gold and coal.

Overall, Tappan said of Fluor’s performance so far in its 1986 fiscal year, “the company is continuing to improve over 1985, though unevenly--as we forecasted earlier this year. Aggressive marketing, continued cost reduction and the maintenance of Fluor’s financial strength will be the company’s focus for the balance of 1986.”

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