Fluor Corp. Posts Record Profit for Latest Fiscal Year : Earnings: Overseas expansion and corporate restructuring are credited for net income of $192.4 million, up 15% from 1993.
Reaping the benefits of aggressive expansion overseas and a corporate restructuring at home, Fluor Corp. on Wednesday reported a record profit of $192.4 million for its latest fiscal year.
The Irvine-based engineering, construction and mining company’s 15% earnings increase for the year ended Oct. 31 equaled $2.32 a share and came on an 8% increase in revenue, to $8.49 billion. That compared to a profit of $166.8 million, or $2.03 a share, on revenue of $7.85 billion for the previous fiscal year.
Les G. McCraw, Fluor’s chairman and chief executive officer, credited the strong showing to the company’s increased emphasis on doing business in the Pacific Rim and in Latin America. It was a watershed year, he said, with international pursuits for the first time outweighing domestic business to make up 51% of the company’s projects.
“We have been on a strong globalization strategy, and it is now paying off,” McCraw said. “We are very optimistic about the opportunities we see around the globe, especially in the Asia-Pacific and Latin American regions. . . . It’s an incredibly large market.”
A yearlong drive to “re-engineer” the giant company by developing cost-cutting procedures and increasing flexibility by moving the decision-making processes farther down the management ranks also paid off. As much as 15% of the profit gain for the year can be traced to that internal effort, McCraw said.
Analysts expressed optimism about Fluor’s prospects for the year ahead.
“Because Fluor works on projects with such long lead times, it can sustain earnings improvement like this for the foreseeable future,” said Kemp Fuller, managing director of New York investment bank and brokerage Commonwealth Associates. Fuller estimates a 14% earnings increase for Fluor in fiscal 1995, to $2.65 a share, or about $220 million.
“Everyone who works in global business sees greater growth opportunities in the international arena than nationally,” Fuller said.
For its fourth quarter, Fluor reported a profit of $52.4 million, or 63 cents a share, a 16% rise from earnings of $45.2 million, or 55 cents a share, for the same period a year earlier. Fluor had posted a gain of $3.1 million, or 4 cents a share, for the final quarter of fiscal 1993 from a pension fund credit in its A.T. Massey Coal Co. coal mining unit. That boosted net income for the three months to $48.3 million, or 59 cents a share.
Revenue for the latest quarter climbed 9%, to $2.39 billion from $2.19 billion.
Fluor said that despite the increase in business for the year, the value of new contracts logged in the final quarter dropped more than 22%, to $1.28 billion from $1.65 billion. Spokeswoman Deborah Land said Fluor’s decision to pursue larger projects means that such quarterly fluctuations are likely to continue because such contracts, while more valuable, take more time to develop.
In Wednesday’s trading on the New York Stock Exchange, Fluor’s common stock rose 25 cents a share to close at $42.875. The day’s trading volume of 498,700 shares was more than half again the three-month average daily volume of 327,900 shares.
Fluor at a Glance
* Headquarters: Irvine
* Founded: 1898, in Oshkosh, Wis.
* Moved to Southern California: 1912
* Founder: Si Fluor
* Chairman and chief executive officer: Les G. McCraw
* Offices: More than 50 worldwide
* Operating companies: 32 worldwide
* Nature of business: Engineering, construction, waste management, coal processing
* Client list: Includes DuPont, Union Carbide, Procter & Gamble
* Employees: 38,000 worldwide
* 1994 sales: $8.49 billion
Fluor Earnings Climb
Fluor Corp. posted the highest earnings in its history for the fiscal year ended Oct. 31. Annual figures in millions of dollars, except data per share:
1991 1992 1993 1994 Revenue 6,572.0 6,600.7 7,850.2 8,485.3 Net income 164.1 5.8 166.8 192.4 Per share 2.01 0.07 2.03 2.32
Source: Fluor Corp.
