DOW JONES NEWSWIRES Fluor Corp. (FLR) said it will record a $163 million charge in its third-quarter results because of estimated cost increases for an offshore wind project. But excluding the charge, the company boosted its earnings target by 20 cents a share, noting it "continues to pursue a robust prospect list and expects to report strong third-quarter new awards." Shares recently fell 5.2% premarket to $49.15. The stock through Friday was up 15% this year. It is not the first problem for the engineering-and-construction firm and the project, for which Fluor got a $1.8 billion contract to build a wind farm some 25 kilometers off the United Kingdom. Construction started in late 2008, and through the second quarter, Fluor recorded $202 million of so-called claim revenue related to cost disputes with the project's owners, Scottish & Southern Energy PLC (SSEZY, SSE.LN) and RWE AG (RWEOY, RWE.XE). Additional costs from the fight are expected in future quarters. Fluor said Monday that during the third quarter, "the project experienced a variety of execution challenges, including material and equipment delivery issues, primarily relating to the installation of wind turbine generators and subsea cabling." As a result, the company "has revised estimates to include substantial costs for additional marine vessels and other subcontractor costs associated with equipment installation, equipment repairs and the estimated schedule impact, which has been exacerbated by weather-related delays. The company has taken a number of remedial actions to mitigate further cost escalation and delays to the schedule." Still, Fluor expects a charge of 90 cents a share for estimated cost increases. Analysts' average estimate, which typically exclude such impacts, was earnings of 72 cents a share. All 140 of the project's monopiles and tower-transition pieces have been installed, with 53 wind-turbine generators in place. The effort is slated for completion in early 2012. -By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354; kevin.kingsbury@dowjones.com
