JEC Jacobs Engineering Group Inc

Fluor Corporation (FLR) reported first-quarter 2012 earnings per share of 91 cents, above the Zacks Consensus Estimate of 87 cents and prior-year earnings per share of 78 cents.

Total Revenue

Total revenue was $6.3 billion, up 24% compared with $5.1 billion in the comparable quarter last year. The growth was aided by significant rise in Industrial & Infrastructure, Oil & Gas and Global Services revenues. New awards for the quarter were $8.4 billion, up 35.5% year over year. Backlog increased by 14% year over year to $42.5 billion. The company won a number of contracts in the international markets for oil & gas production and refining and mining.

Segment Revenue

Revenue from Oil & Gas segment was $2.0 billion in first-quarter 2012, up 23% year over year, driven by improvement in both upstream and downstream businesses. New awards won during the year were $3.9 billion with backlog amounting to $16.8 billion.

Industrial & Infrastructure revenue was $2.8 billion, an increase of 40% year over year. The rise was due to increased mining and metals business. New awards won during the year were $3.7 billion with backlog amounting to $21.4 billion at the end of the quarter. 

Government segment revenue was $850 million, an increase of 3.9% year over year. New awards won during the quarter were $389 million with backlog amounting to $695 million at the end of the quarter.

Global Services segment posted revenue of $426 million, an increase of 13% year over year, driven by growth in equipment and operation as well as maintenance business. New awards won during the year were $249 million with backlog amounting to $1.9 billion at the end of the quarter.

Power segment revenue declined to $175 million, down 17.5% year over year. New awards won during the quarter were $93 million with backlog amounting to $1.8 billion at the end of the quarter.

Income & Expenses

Earnings before taxes were $240.8 million, down 0.01% compared with $241.1 million at the end of the prior-year quarter. Total cost and expenses for the quarter amounted to $6.0 billion, up 25.6% compared with $4.82 billion.

Operating margin in Oil & Gas segment was 3.6% compared with 3.7% in the prior-year period, Infrastructure & Industrial segment margin came in at 3.7% compared with 4.6% and in Government segment margin was 4.2% from flat in the year-ago quarter. Besides, operating margin in Global Services segment and Power segment were 10.1% and (1.1)% compared with 8.2% and 13.9%, respectively, in the year-ago quarter.

Balance Sheet & Cash Flow

Cash and marketable securities, including noncurrent, amounted to $2.65 billion at the end of the quarter compared with $2.76 billion at the end of 2011. Long-term debt was $513.6 million compared with $513.5 million and shareholder’s equity was $3.54 billion compared with $3.40 billion at the end of 2011.

Outlook

Fluor maintained its 2012 earnings per share guidance of $3.40 – $3.80. The company’s solid earnings and strong new awards and backlog are favorable factors.

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 long-term Neutral rating on Fluor Corporation. The company holds a short-term (1-3 months) Zacks #3 Rank (Hold).

 
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