Fluor Dips, Sees Better Times Ahead
Fluor Corp. posted lower first-quarter earnings Tuesday, but said it is comfortable with estimates for the full year as new project orders and margins continue to improve.
The Aliso Viejo engineering and construction company said net income totaled $11.2 million, or 15 cents a share, down from $51 million, or 66 cents a share, a year earlier, which included $14.3 million from discontinued operations.
The net income for the recent quarter included $16.2 million in compensation charges tied to the company’s stock price. Earnings excluding the charge would have totaled $27.4 million, or 36 cents a share.
Analysts’ estimates averaged 36 cents a share, according to a survey by First Call/Thomson Financial.
Fluor said it is required to adjust earnings at the end of each quarter based on the stock price and the number of unexercised stock incentive units owned by management.
First-quarter revenue from continuing operations fell nearly 12% to $2.02 billion. New project awards for the first quarter rose 43% to $2.5 billion and backlog rose 11% to $10.2 billion.
As a result of the company’s change to a calendar year, the first-quarter results are being compared to the second fiscal quarter ended April 30 last year, the closest comparison period, Fluor said.
Fluor said it remains comfortable with earnings estimates of $2 a share for the year, down from the $2.26 a share it earned a year ago. It sees operating earnings of 40 cents to 45 cents a share for the second quarter.
“New awards volume and margins trends are continuing to improve,” said Philip Carroll Jr., chairman and chief executive. “However, as we have previously cautioned, there is a time lag in the recognition of earnings from these awards, particularly for large, multiyear projects.”
The company said it is focusing on reducing its asset base and improving its return on capital. It is planning to sell and lease back its Houston facility and is pursuing the sale of the dealership operations of its Ameco heavy equipment business.
Fluor’s shares rose $1.94 to $54.65 on the New York Stock Exchange. The stock has risen more than 65% this year. (Reuters)
