Fluor Reaches New 52-Week High - Analyst Blog
April 02 2013 - 1:00PM
Zacks
Shares of Fluor Corporation (FLR) reached a
52-week high of $66.83 on Monday, Apr 1, 2013 following its solid
fourth quarter 2012 results, strong double-digit growth in Oil
& Gas and Global Services and strength in Industrial &
Infrastructure segments.
The closing price of the engineering conglomerate on Apr 1, 2013
was $65.44, representing a robust one-year return of about 7.0% and
year-to-date return of about 7.3%. Average volume of shares traded
over the last three months stood at approximately 1447K.
Fluor delivered a positive earnings surprise in the last four
quarters with an average beat of 32.2%. This Zacks Rank #3 (Hold)
company has a market cap of $10.6 billion and a long-term expected
earnings growth rate of 12.7%.
Solid Fourth Quarter Results
Fluor Corporation reported fourth-quarter 2012 earnings per
share from continuing operations of $1.58, well above the Zacks
Consensus Estimate of earnings per share of 68 cents.
Total revenue was $7.02 billion in fourth quarter of 2012
compared with $6.25 billion in the fourth quarter of 2011.
Consolidated backlog at the end of the year was $38.2 billion
compared with $39.5 million at the end of 2011.
Revenue from the Oil & Gas segment was $9.5 billion in 2012,
up 19% year over year, driven by new awards and good order backlog.
New awards won during the year were approximately $12.6 billion
with backlog amounting to $18.2 billion. Petrochemical projects in
North America, Europe and Asia aided backlog of the company.
Industrial & Infrastructure revenue was $12.2 billion, an
increase of 26% year over year. The rise was due to increased
mining and metals business. New awards won during the year were
$9.5 billion with backlog amounting to $15.5 billion at the end of
the year.
New awards in 2012 were strong at $27.1 billion, compared with
bookings of $26.9 billion a year ago, including $12.6 billion in
Oil & Gas and $9.5 billion in Industrial &
Infrastructure.
Guidance
Management is positive about an upbeat performance in the year
2013, given its strength in the oil & gas segment and the
Industrial Infrastructure segment. Further, the company is
strengthening its position in the metals and mining segment (which
is included in the Industrial Infrastructure segment).
The company maintained its 2013 earnings per share guidance of
$3.85 – $4.35. Fluor derives significant benefits from diverse
end-markets.
Series of Contracts for Fluor
On Mar 15, Fluor received a contract from Crosslands Resources,
an Australian mining company, to conduct a study regarding the
feasibility of the Jack Hills Expansion Project located in Western
Australia. Fluor will be responsible for analyzing, upgrading and
finalizing the initial analysis of the extensive expansion project
of Iron Ore Mine conducted by the Strategic Asset Review department
of Fluor. The company is optimistic about this contract and expects
it to boost its Metal and Mining business.
On Mar 12, Fluor received a FEED (Front-End Engineering and
Design) contract jointly from Qatar Petroleum and Shell for
Al-Karaana Petrochemicals Complex in Ras Laffan Industrial City,
Qatar. The project is expected to be the foundation for future
petrochemical development projects in the Middle East. It will be a
world-scale ethane-based cracker and derivatives complex, including
two train mono ethylene glycol units using Shell’s proprietary
OMEGA (Only MEG Advantaged) technology. Fluor is extremely hopeful
that the project will not only strengthen the company’s
long-standing relationship with both Qatar Petroleum and Shell but
will also realize record revenue growth in the upcoming quarter
since the Middle East is an important area of operations for Fluor.
This project can prove to be a launch pad for the company’s future
business developments in Qatar.
In addition, the company also settled a lawsuit against the
company’s management of the Hazardous Materials Management and
Emergency Response (HAMMER) facility.
Estimate Revision
The Zacks Consensus Estimates for 2013 and 2014 rose 0.2% and
0.6% to $4.17 and $4.70, respectively, in the past 30 days. One
estimate moved upward for 2013 and 2014, respectively, over the
same time frame.
However, none of the estimates moved downward for 2013 and 2014
in the past 30 days.
Conclusion
We expect the growth in the oil & gas segment and the metals
and mining business to be the key drivers for Fluor’s upcoming
quarters.
Other Stocks to Consider
Other stocks in the technology industry that are currently
performing well and have solid visibility include AECOM
Technology Corp. (ACM), Chicago Bridge &
Iron (CBI) and Jacobs Engineering Group
Inc. (JEC). All these stocks carry a Zacks Rank # 2
(Buy).
AECOM TECH CORP (ACM): Free Stock Analysis Report
CHICAGO BRIDGE (CBI): Free Stock Analysis Report
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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