High Costs Push Fluor’s 1st-Quarter Earnings Down 6.8%

Fluor Corp., the nation’s largest construction and engineering company, said Wednesday that fiscal first-quarter net income fell 6.8% as costs rose and competition increased.

The Irvine company earned $51.1 million for the three months ended Jan. 31, down from $54.8 million a year earlier. Earnings per share rose to 68 cents from 66 cents because of fewer shares outstanding in the latest quarter.

The company was expected to earn 69 cents, according to analysts surveyed by First Call Corp.

Sales fell slightly to $3.38 billion from $3.4 billion.

In addition to the effects of competition, corporate costs were about $9.1 million higher than a year earlier, when the designer and builder of factories, bridges and power plants recognized a $10-million credit from its long-term incentive plan.

“General business conditions in many of our end markets are becoming more challenging,” Chairman and Chief Executive Philip J. Carroll Jr. said in a statement.

Economic problems in Asia and Latin America made it hard for global customers to buy services, Chief Financial Officer James Rollans said. Fluor’s A.T. Massey coal-mining business also struggled as steel factories, which buy the coal, produced less as they competed with cheaper, Asian-made steel, Rollans said.

Fluor said some customers are putting off plans for new projects. Awards for new engineering and construction in the quarter fell to $1.7 billion from $2.6 billion a year earlier. Fluor’s backlog, or the value of projects under contract but not completed, fell to $11.1 billion from $12.6 billion at the end of the fiscal fourth quarter.

The company’s stock fell $1 a share to $35.56 Wednesday in trading on the New York Stock Exchange. Fluor shares were slightly higher than the 52-week low of $34.13, established Oct. 8. The stock traded as high as $52.50 last March.