Earnings Preview: Fluor Corporation - Analyst Blog
October 29 2012 - 12:50PM
Zacks
Fluor Corporation (FLR) is slated to release
its third-quarter 2012 earnings results on Thursday, November 1,
2012. The current Zacks Consensus Estimate for third-quarter
earnings per share (EPS) is 97 cents, representing annualized
growth of 24.36%.
FLR’s earnings were above the Zacks Consensus Estimate in first
and second quarters of 2012 and also in the fourth quarter of 2011
while earnings were below the Estimate in the third quarter of
2011. The company’s average positive earnings surprise for the
trailing four quarters was 2.35%.
Third Quarter Highlights
FLIR Systems reported its second-quarter 2012 earnings from
continuing operations of $0.95, 3.3% higher than the Zacks
Consensus Estimate of $0.92 and up 1.1% from the prior-year
earnings of $0.94. Profits during the quarter were driven by
end-market diversification and strong international presence.
Total revenue for the quarter grew 18.1% year over year to $7.1
billion on the back of higher revenues across all the company’s
segments. Total backlog as of June 30, 2012, was about $43.0
billion compared with $2.7 billion as of June 30, 2011.
Revenue from the Oil & Gas segment increased by 16% year
over year, driven by an improvement in the upstream business.
Industrial & Infrastructure revenue was up 29.2% due to
increased mining and metals businesses. Government segment revenue
was up 2.7% while Global Services revenue declined by 0.6%. Power
segment revenue was flat year over year, impacted by a relatively
weak demand for new power generation.
Agreement of Estimate Revisions
None of the analysts have either increased or decreased their
estimates in the last 7 or 30 days.
Magnitude of Estimate Revisions
In the last 7 or 30 days, there was no change in earnings
estimate for the third-quarter 2012, fourth-quarter 2012, full-year
2012 or full-year 2013.
Our Take
Fluor’s favorable contract mix, diverse service offerings and
strong relationships around the world allow it to sustain operating
margin going forward relative to its peers without diminishing
growth potential.
Driven by the company’s strong performance in the second
quarter, management had raised the lower end of its 2012 earnings
guidance. Earnings per share are now expected in the range of $3.50
to $3.80, up from $3.40 to $3.80 projected earlier. The company’s
solid earnings and strong new awards and backlog are favorable
factors.
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.
Fluor performs operations and maintenance activities for major
industrial clients and, in some cases, operate and maintain their
equipment fleet. The company’s prime competitor is Jacob’s
Engineering Group (JEC).
We continue to maintain a Neutral rating on Fluor for the long
term. The company has a Zacks #3 Rank (Hold recommendation) over
the next one-to-three months.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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