JEC Jacobs Engineering Group Inc

Fluor Corporation (FLR) reported first-quarter 2011 earnings per share of 78 cents, outperforming the Zacks Consensus Estimate of 76 cents. Prior-year earnings per share were also 76 cents.

Total Revenue

Total revenue was $5.1 billion compared with $4.9 billion in the first quarter of 2010, led by growth in the Industrial & Infrastructure segment but partially offset by lower revenue from Oil & Gas and Power segment.

Segment Revenue

Revenue from Oil & Gas segment was $1.7 million compared with $2.1 million in the year-ago quarter. Weak oil and gas market for the past two years continue to affect the segment result. New awards won during the quarter were approximately $966 million with backlog amounting to $13.6 million at the end of the quarter.

Industrial & Infrastructure revenue was $2.0 billion, an increase of 60% year over year as the mining and metals as well as infrastructure business continued to perform well. New awards won during the quarter were $3.9 billion with backlog amounting to $19.8 billion at the end of the quarter. 

Government segment revenue was $818 million, an increase of 23% year over year due to increased order of LOGCAP IV task in Afghanistan. New awards won during the quarter were $882 million with backlog amounting to $811 million at the end of the quarter.

Global Services segment posted revenue of $378 million, an increase of 12% year over year, led by improvement in the operations and maintenance businesses. New awards won during the quarter were $422 million with backlog amounting to $2.2 billion at the end of the quarter.

Power segment revenue declined by 60% to $212 million as a result of many projects reaching its completion phase in 2010. Further, weak demand for new domestic power generation decreased the level of new awards. New awards won during the quarter were $57 million with backlog amounting to $812 million at the end of the quarter.

Income & Expenses

Earnings before taxes were $241.1 million compared with $233.1 million at the end of the prior-year quarter. Total cost and expenses for the quarter amounted to $4.82 billion compared with $4.69 billion.

Operating margin in Oil & Gas segment was 3.7% compared with 4.3% in the prior-year period, Infrastructure & Industrial segment came in at 4.6% compared with 2.5%, Government segment was 4.2% compared with 5.3%, in Global Services segment was 8.2% compared with 8.15 and in power segment was 13.9% compared with 10.6% in the comparable quarter last year.

Balance Sheet & Cash Flow

Cash and marketable securities, including noncurrent amounted to $2.65 billion at the end of the quarter compared with $2.61 billion at the end of prior-year period. Long-term debt was $17.8 million, flat year over year and shareholder’s equity was $3.42 billion compared with $3.50 billion in the year-ago quarter.

Cash Flow from operating activities was $370.5 million in the quarter compared with cash outflow of $246.0 million in the prior-year period.

Outlook

The company maintained its 2011 earnings per share guidance of $3.00 to $3.40 as it continues to expect a substantial order booking during the year.

Acting through its subsidiaries, Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis.

It serves a diverse set of industries worldwide including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government.  The company’s prime competitor is Jacob’s Engineering Group (JEC).

We continue to maintain a Neutral rating on Fluor Corporation, with a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.

 
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