Fluor Corporation (NYSE: FLR) today announced financial results
for its first quarter ended March 31, 2019. The first quarter was a
net loss attributable to Fluor of $58 million, or $0.42 per diluted
share, compared to a net loss of $18 million, or $0.13 per diluted
share a year ago. Earnings attributable to Fluor were negatively
impacted by $39 million, or $0.28 per diluted share, as a result of
restructuring charges, foreign exchange losses and related tax
impacts. Excluding these items, adjusted earnings attributable to
Fluor for the first quarter was a net loss of $19 million, or a
loss of $0.14 per diluted share. Consolidated segment profit for
the quarter was $47 million compared to $52 million a year ago.
First quarter revenue was $4.2 billion compared to $4.8 billion
last year.
New awards for the quarter were $3.4 billion, including $1.3
billion in Mining, Industrial, Infrastructure & Power, $1
billion in Energy & Chemicals, $810 million in Diversified
Services and $331 million in Government. Consolidated ending
backlog of $39.3 billion compares to $29.1 billion a year ago.
Corporate G&A expense for the first quarter of 2019 was $61
million, compared with $57 million a year ago. Expenses for the
quarter include $19 million related to foreign exchange losses
compared to $12 million a year ago. Fluor’s cash and marketable
securities balance at the end of the first quarter was $1.9
billion, compared to $2.0 billion last quarter. During the quarter,
the company utilized $17 million in cash from operating activities,
and paid out $30 million in dividends.
Outlook
As a result of a revision of our business forecast in Energy
& Chemicals and Mining, Industrial, Infrastructure and Power,
the company is issuing adjusted earnings per share guidance of
$1.50 to $2.00 per diluted share. Adjusted EPS guidance excludes
costs related to restructuring and foreign exchange
fluctuations.
Business Segments
Fluor’s Energy & Chemicals segment reported segment profit
of $19 million, compared to $106 million in the first quarter
of 2018. Results for the quarter include pre-tax charges of $53
million for forecast revisions on an offshore project and $31
million for the resolution of close-out matters with a customer,
partially offset by favorable project forecast revisions. First
quarter 2019 revenue was $1.5 billion compared to $1.9 billion a
year ago. New awards in the first quarter were $1 billion including
a construction contract for a chemical complex on the U.S. Gulf
Coast. Ending backlog was $17.4 billion compared to $14.1 billion a
year ago.
The Mining, Industrial, Infrastructure & Power segment
reported a segment profit of $0.4 million, compared to a segment
loss of $120 million in the first quarter of 2018. Results for the
quarter include a pre-tax charge of approximately $26 million
related to legacy gas-fired power projects. Revenue for the segment
was $1.4 billion compared to $907 million a year ago primarily due
to increased project execution activities in mining & metals.
New awards in the first quarter were $1.3 billion including the
Red/Purple line modernization project for the Chicago Transit
Authority. Ending backlog for the segment was $15.1 billion
compared to $10.3 billion a year ago.
The Government segment reported segment profit of $17 million,
compared to $48 million a year ago. Revenue for the segment
declined to $785 million from $1.3 billion a year ago. Results for
the first quarter reflect the completion of the power restoration
project in Puerto Rico a year ago and the inclusion of expenses
related to NuScale. New awards totaled $331 million for the
quarter, and ending backlog was $4.2 billion, up from $2.4 billion
a year ago.
The Diversified Services segment reported a segment profit of
$10 million in the first quarter of 2019, compared to $19 million a
year ago. Revenue for the quarter was $550 million compared to $643
million in the first quarter of 2018. New awards totaled $810
million for the quarter, and ending backlog was $2.6 billion, up
from $2.3 billion a year ago.
First Quarter Conference Call – Revised
Time
Fluor will now host a conference call today at 8:30 a.m. Eastern
time, which will be webcast live on the Internet and can be
accessed by logging onto http://investor.fluor.com. The call will
also be accessible by telephone at 888-254-3590 (U.S./Canada) or
323-994-2093. The conference ID is 9132841. A supplemental slide
presentation will be available shortly before the call begins.
A replay of the webcast will be available for 30 days. A replay
of the call will be available by telephone for one week by dialing
888-203-1112 (U.S./Canada) or 719-457-0820, conference ID
9132841.
Non-GAAP Financial
Measure
This press release contains discussions of consolidated segment
profit, adjusted earnings and adjusted earnings per diluted share
that would be deemed non-GAAP financial measures under SEC rules.
Segment profit is calculated as revenue less cost of revenue and
earnings attributable to noncontrolling interests excluding:
corporate general and administrative expense; interest expense;
interest income; domestic and foreign income taxes; and other
non-operating income and expense items. The company believes that
consolidated segment profit provides a meaningful perspective on
its business results as it is the aggregation of individual segment
profit measures that the company utilizes to evaluate and manage
its business performance. Adjusted earnings and adjusted earnings
per diluted share exclude restructuring charges, foreign exchange
impacts and related tax impacts. The company believes that adjusted
earnings and adjusted earnings per diluted share allow investors to
evaluate the company’s ongoing earnings potential on a normalized
basis and make meaningful period-over-period comparisons.
Reconciliations of consolidated segment profit to earnings (loss)
before taxes, adjusted earnings to GAAP net earnings, and adjusted
earnings per diluted share to GAAP earnings per diluted share are
included in the press release tables. This press release also
includes forward-looking references to adjusted earnings per
diluted share guidance. Reconciliation of the adjusted earnings per
diluted share guidance to GAAP earnings per diluted share is not
available without unreasonable efforts because the company cannot
predict with sufficient certainty all of the components required to
provide such reconciliation.
About Fluor Corporation
Founded in 1912, Fluor Corporation (NYSE: FLR) is a global
engineering, procurement, fabrication, construction and maintenance
company that transforms the world by building prosperity and
empowering progress. With its integrated solutions approach, Fluor
serves its clients by designing, building and maintaining safe,
well executed, capital-efficient projects around the world. With
headquarters in Irving, Texas, Fluor ranks 153 on the Fortune 500
list with revenue of $19.2 billion in 2018 and has more than 53,000
employees worldwide. For more information, please visit
www.fluor.com or follow Fluor on Facebook, Twitter, LinkedIn and
YouTube.
Forward-Looking Statements: This
release may contain forward-looking statements (including without
limitation statements to the effect that the Company or its
management "believes," "expects," is “positioned” or other similar
expressions). These forward-looking statements, including
statements relating to future growth, backlog, earnings and the
outlook for the Company’s business are based on current management
expectations and involve risks and uncertainties. Actual results
may differ materially as a result of a number of factors,
including, among other things, the cyclical nature of many of the
markets the Company serves, including the Company’s Energy &
Chemicals segment; the Company's failure to receive new contract
awards; cost overruns, project delays or other problems arising
from project execution activities, including the failure to meet
cost and schedule estimates; intense competition in the industries
in which we operate; failure to obtain favorable results in
existing or future litigation, dispute resolution proceedings or
claims, including claims for additional costs; failure of our joint
venture or other partners, suppliers or subcontractors to perform
their obligations; cyber-security breaches; foreign economic and
political uncertainties; client cancellations of, or scope
adjustments to, existing contracts; failure to maintain safe
worksites and international security risks; risks or uncertainties
associated with events outside of our control, including weather
conditions; client delays or defaults in making payments; the
Company’s failure, or the failure of our agents or partners, to
comply with laws; the use of estimates and assumptions in preparing
our financial statements; the potential impact of certain tax
matters; possible information technology interruptions or inability
to protect intellectual property; new or changing legal
requirements, including those relating to environmental, health and
safety matters; the availability of credit and restrictions imposed
by credit facilities, both for the Company and our clients,
suppliers, subcontractors or other partners; the Company's ability
to secure appropriate insurance; liabilities associated with the
performance of nuclear services; foreign currency risks; the
inability to hire and retain qualified personnel; the loss of one
or a few clients that account for a significant portion of the
Company's revenues; possible limitations on bonding or letter of
credit capacity; risks or uncertainties associated with
acquisitions, dispositions and investments; asset impairments; and
risks arising from the inability to successfully integrate acquired
businesses. Caution must be exercised in relying on these and other
forward-looking statements. Due to known and unknown risks, the
Company’s results may differ materially from its expectations and
projections.
Additional information concerning these and other factors can be
found in the Company's public periodic filings with the Securities
and Exchange Commission, including the discussion under the heading
"Item 1A. Risk Factors" in the Company's Form 10-K filed on
February 21, 2019. Such filings are available either publicly or
upon request from Fluor's Investor Relations Department: (469)
398-7222. The Company disclaims any intent or obligation other than
as required by law to update its forward-looking statements in
light of new information or future events.
FLUOR CORPORATION CONSOLIDATED FINANCIAL
RESULTS (in millions, except per share amounts)
Unaudited CONSOLIDATED
OPERATING RESULTS THREE MONTHS ENDED MARCH 31
2019 2018 Revenue $ 4,192.7 $ 4,823.8 Cost and
expenses: Cost of revenue 4,131.0 4,766.0 Corporate general and
administrative expense 61.0 57.3 Restructuring and other exit costs
27.4 — Interest expense, net 5.7 9.6 Total cost and
expenses 4,225.1 4,832.9 Earnings (loss) before taxes
(32.4 ) (9.1 ) Income tax expense 10.9 3.0 Net
earnings (loss) (43.3 ) (12.1 ) Less: Net earnings attributable to
noncontrolling interests 15.1 5.5 Net earnings (loss)
attributable to Fluor Corporation $ (58.4 ) $ (17.6 ) Basic
earnings (loss) per share Net earnings (loss) $ (0.42 ) $ (0.13 )
Weighted average shares 139.8 140.1 Diluted earnings (loss) per
share Net earnings (loss) $ (0.42 ) $ (0.13 ) Weighted average
shares 139.8 140.1 New awards $ 3,400.2 $ 2,536.1 Backlog $
39,333.3 $ 29,132.2 Work performed $ 4,081.7 $ 4,710.0
U.S. GAAP RECONCILIATION OF ADJUSTED EARNINGS (LOSS) AND
ADJUSTED EARNINGS (LOSS) PER DILUTED SHARE (in millions,
except per share amounts) THREE MONTHS
ENDED MARCH 31 2019 GAAP net earnings (loss)
attributable to Fluor Corporation $ (58.4 ) Restructuring and
other exit costs 27.4 Foreign exchange impact 26.6 Tax effect of
above items (14.9 )
Adjusted earnings (loss) $ (19.3 )
GAAP earnings (loss) per diluted share $ (0.42 )
Effect of adjustments to net earnings (loss) 0.28
Adjusted earnings (loss) per diluted share $ (0.14 )
Weighted average shares 139.8
FLUOR
CORPORATION Unaudited BUSINESS SEGMENT
FINANCIAL REVIEW AND U.S. GAAP RECONCILIATION OF CONSOLIDATED
SEGMENT PROFIT ($ in millions)
THREE MONTHS ENDED MARCH 31 2019
2018 Revenue Energy & Chemicals $ 1,476.6 $
1,943.0 Mining, Industrial, Infrastructure & Power 1,381.2
907.0 Government 784.7 1,330.5 Diversified Services 550.2
643.3
Total revenue $ 4,192.7
$ 4,823.8 Segment profit (loss) $
and margin % (2) Energy & Chemicals $ 19.4 1.3 % $
105.7 5.4 % Mining, Industrial, Infrastructure & Power 0.4 — %
(120.4 ) (13.3 )% Government(1) 16.6 2.1 % 48.2 3.6 % Diversified
Services 10.2 1.9 % 18.8 2.9 %
Total segment
profit $ and margin % $ 46.6 1.1 %
$ 52.3 1.1 % Corporate general
and administrative expense (61.0 ) (57.3 ) Restructuring and other
exit costs (27.4 ) — Interest expense, net (5.7 ) (9.6 ) Earnings
attributable to noncontrolling interests 15.1 5.5
Earnings (loss) before taxes $ (32.4 )
$ (9.1 ) (1) Includes research
and development expenses associated with NuScale totaling $16
million and $23 million for the three months ended March 31, 2019
and 2018, respectively. (2) Segment profit margin % is calculated
as segment profit divided by segment revenue.
FLUOR CORPORATION Unaudited
SELECTED BALANCE SHEET ITEMS ($ in millions)
March 31, 2019 December 31, 2018 Cash and marketable
securities $ 1,904.5 $ 1,979.6 Total current assets 5,242.6 5,440.9
Total assets 9,041.7 8,913.6 Total short-term debt 35.9 26.9 Total
current liabilities 3,527.9 3,552.5 Long-term debt 1,650.9 1,661.6
Shareholders' equity 2,952.3 2,963.2
SELECTED CASH FLOW
ITEMS ($ in millions)
THREE MONTHS ENDED MARCH 31
2019 2018 Cash utilized by operating
activities $ (17.5 ) $
(136.0 ) Investing activities Net sales
and maturities (purchases) of marketable securities 116.1 130.9
Capital expenditures (48.2 ) (65.1 ) Proceeds from disposal of
property, plant and equipment 10.7 16.5 Investments in partnerships
and joint ventures (12.0 ) (15.5 ) Other items 1.1 0.1
Cash provided by investing activities 67.7
66.9 Financing activities
Dividends paid (30.0 ) (30.2 ) Distributions paid to noncontrolling
interests, net of capital contributions (5.4 ) (22.9 ) Other items
5.6 (4.9 )
Cash utilized by financing activities
(29.8 ) (58.0 ) Effect of
exchange rate changes on cash 20.6 9.0
Increase (decrease) in cash and cash
equivalents $ 41.0 $ (118.1
) Depreciation $
45.3 $ 51.9
FLUOR CORPORATION Supplemental Fact Sheet
Unaudited NEW AWARDS
($ in millions) THREE
MONTHS ENDED MARCH 31 2019 2018 Energy
& Chemicals $ 1,003 29 % $ 721 28 % Mining, Industrial,
Infrastructure & Power 1,256 37 % 1,339 53 % Government 331 10
% 43 2 % Diversified Services 810 24 % 433
17 %
Total new awards $ 3,400
100 % $ 2,536
100 % BACKLOG TRENDS ($ in
millions) AS OF MARCH 31 2019 2018
Energy & Chemicals $ 17,441 44 % $ 14,127 49 % Mining,
Industrial, Infrastructure & Power 15,092 38 % 10,273 35 %
Government 4,231 11 % 2,399 8 % Diversified Services 2,569
7 % 2,333 8 %
Total backlog $
39,333 100 % $
29,132 100 %
United States $ 12,455 32 % $ 11,673 40 % The Americas (excluding
the United States) 15,776 40 % 3,779 13 % Europe, Africa and the
Middle East 8,757 22 % 12,232 42 % Asia Pacific (including
Australia) 2,345 6 % 1,448 5 %
Total
backlog $ 39,333 100
% $ 29,132 100 %
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Brian MershonMedia Relations469.398.7621 tel
Jason Landkamer469.398.7222 telInvestor Relations
Fluor (NYSE:FLR)
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