Fluor Corporation (NYSE: FLR) today announced financial results
for its first quarter ended March 31, 2015. Net earnings
attributable to Fluor for the first quarter were $144 million, or
$0.96 per diluted share, compared to $149 million, or
$0.92 per diluted share a year ago. Consolidated segment
profit for the quarter was $276 million, compared to $268 million
in the first quarter of 2014. Segment profit results reflect
continued improvement in Oil & Gas as well as Government,
partly offset by declines in the Industrial & Infrastructure
segment’s mining and metals business line. Revenue for the first
quarter was $4.5 billion, down from $5.4 billion last year,
primarily due to continued reductions in the mining and metals
business line.
New awards for the quarter were $4.4 billion, including $2.9
billion in Oil & Gas and $1.4 billion in Industrial &
Infrastructure. Consolidated backlog at the end of the quarter was
$41.2 billion, up from $40.2 billion a year ago.
"Our ability to provide clients with capital efficient project
execution through our integrated solutions model continues to gain
traction, as evidenced this quarter by strong Oil & Gas
performance," said Chairman and Chief Executive Officer David
Seaton. "While bookings may be slower over the near term, we
continue to see a number of high quality world scale
opportunities."
Corporate G&A expense for the first quarter of 2015 was $41
million, compared with $38 million a year ago. During the quarter,
the Company repurchased approximately $112 million worth of
Fluor shares, and paid out $32 million in dividends to
shareholders. Fluor’s cash and marketable securities balance
remains strong at $2.2 billion.
Ending backlog was reduced by approximately $1.6 billion as a
result of the strong dollar. Foreign exchange rates did not have a
significant impact on earnings for the first quarter.
Outlook
Overall, the first quarter was consistent with the Company’s
prior guidance for a slow start in 2015. As a result, the company
is maintaining its 2015 guidance range of $4.40 to $5.00 per
diluted share. This guidance excludes the effects of the previously
announced termination and settlement of Fluor’s U.S. defined
benefit pension plan which is expected in the latter part of
2015.
Business Segments
Fluor’s Oil & Gas business reported segment profit of $183
million, an increase from $139 million in the first quarter of
2014. Revenue of $2.5 billion declined from $2.8 billion a year ago
primarily due to certain large projects progressing towards
completion. Strong segment profit performance reflects increased
contributions from refining projects awarded in 2014. New awards
for the segment totaled $2.9 billion, including a pipeline project
in the United States. Ending backlog for the Oil & Gas segment
rose 8 percent, from $25.8 billion a year ago, to end the quarter
at $27.8 billion.
The Industrial & Infrastructure group reported segment
profit of $71 million, a 27 percent decline from $97 million in the
first quarter of 2014. Revenue for the quarter was $1.1 billion,
down from $1.6 billion a year ago. Revenue and segment profit
results reflect a decline in contributions from the mining and
metals business line. New awards for the first quarter were $1.4
billion, primarily for mining and metals and industrial services
customers. Backlog at quarter end was $7.3 billion, down from $9.8
billion a year ago, mainly due to project execution outpacing new
award activity in the mining and metals and infrastructure business
lines.
Segment profit for the Government group was $15 million, up
modestly from $13 million a year ago. Revenue for the quarter
improved 9 percent to $646 million, due to the increased execution
activities on projects awarded in 2014. New awards totaled $74
million for the quarter, and ending backlog was $4.2 billion, up
from $2.6 billion a year ago.
Segment profit for the Global Services segment was $15 million
in the first quarter which compares to $21 million a year ago.
Revenue was $130 million, down from $142 million last year. Results
in the quarter were driven by reductions in the equipment business
line’s activities in Afghanistan and Latin America.
Fluor’s Power group reported a segment loss of $9 million,
compared to a loss of $1 million a year ago. Excluding NuScale
expenses of $17 million in the first quarter and $13 million a year
ago, segment profit was $8 million and $12 million respectively.
Segment revenue for the quarter decreased 12 percent to $221
million, compared with $251 million a year ago, due to the
completion of two major projects in 2014. New awards for the
quarter were $114 million compared with $166 million in the first
quarter of 2014. Ending backlog was $1.9 billion, which was
comparable with a year ago.
First Quarter Conference
Call
Fluor will host a conference call at 5:30 p.m. Eastern time on
Thursday, April 30, which will be webcast live on the Internet and
can be accessed by logging onto http://investor.fluor.com. A
supplemental slide presentation will be available shortly before
the call begins. The webcast and presentation will be archived for
30 days following the call. Certain non-GAAP financial measures, as
defined under SEC rules, are included in this press release and may
be discussed during the conference call. A reconciliation of these
measures is included in this press release which will be posted in
the investor relations section of the Company’s website.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is a global engineering and
construction firm that designs and builds some of the world's most
complex projects. The company creates and delivers innovative
solutions for its clients in engineering, procurement, fabrication,
construction, maintenance and project management on a global basis.
For more than a century, Fluor has served clients in the energy,
chemicals, government, industrial, infrastructure, mining and power
market sectors. Headquartered in Irving, Texas, Fluor ranks 109 on
the FORTUNE 500 list. With 40,000 employees worldwide, the
company's revenue for 2014 was $21.5 billion. Visit Fluor at
www.fluor.com and follow on Twitter @FluorCorp.
Forward-Looking Statements: This
release may contain forward-looking statements (including without
limitation statements to the effect that the Company or its
management "believes," "expects," "anticipates," "plans" or other
similar expressions). These forward-looking statements, including
statements relating to future backlog, revenue and earnings,
expected performance of the Company's business and the outlook of
the markets which the Company serves are based on current
management expectations and involve risks and uncertainties. Actual
results may differ materially as a result of a number of factors,
including, among other things, the cyclical nature of many of the
markets the Company serves, including the Company’s commodity-based
business lines, and the Company’s vulnerability to downturns; the
Company's failure to receive anticipated new contract awards and
the related impacts on revenues, earnings, staffing levels and
costs; difficulties or delays incurred in the execution of
contracts, resulting in cost overruns or liabilities, including
those caused by the performance of the Company’s clients,
subcontractors, suppliers and joint venture or teaming partners;
client cancellations of, or scope adjustments to, existing
contracts, and the related impacts on staffing levels and cost;
intense competition in the global engineering, procurement and
construction industry, which can place downward pressure on the
Company’s contract prices and profit margins; current economic
conditions affecting our clients, partners, subcontractors and
suppliers, which may result in decreased capital investment or
expenditures by the Company’s clients or may increase costs or
delay project schedules; foreign economic and political
uncertainties that could lead to project disruptions, increased
costs and potential losses; failure to obtain favorable results in
existing or future litigation or dispute resolution proceedings;
delays or defaults in client payments; failure to meet timely
completion or performance standards that could result in higher
costs, reduced profits or, in some cases, losses on projects;
liabilities arising from faulty services; risks or uncertainties
associated with events outside of our control, such as the effects
of severe weather, which may result in project delays, increased
costs, liabilities or losses on projects; the Company’s failure, or
the failure of our agents or partners, to comply with laws,
including anti-bribery laws, international trade laws or
environmental, health and safety laws or regulations; the potential
impact of certain tax matters including, but not limited to, those
from foreign operations and ongoing audits by tax authorities;
possible information technology interruptions, security breaches or
inability to protect intellectual property; foreign exchange risks;
the inability to hire and retain qualified personnel; failure to
maintain safe worksites and international security risks; the
availability of credit and restrictions imposed by credit
facilities, both for the Company and our clients, suppliers,
subcontractors or other partners; possible limitations on bonding
or letter of credit capacity; risks or uncertainties associated
with acquisitions, dispositions and investments; and the Company’s
ability to secure appropriate insurance. Caution must be exercised
in relying on these and other forward-looking statements. Due to
known and unknown risks, the Company’s results may differ
materially from its expectations and projections.
Additional information concerning these and other factors can be
found in press releases as well as the Company's public periodic
filings with the Securities and Exchange Commission, including the
discussion under the heading "Item 1A. Risk Factors" in the
Company's Form 10-K filed on February 18, 2015. Such filings are
available either publicly or upon request from Fluor's Investor
Relations Department: (469) 398-7070. The Company disclaims any
intent or obligation other than as required by law to update its
forward-looking statements in light of new information or future
events.
FLUOR CORPORATION CONSOLIDATED FINANCIAL
RESULTS (in millions, except per share amounts)
Unaudited CONSOLIDATED
OPERATING RESULTS THREE MONTHS ENDED MARCH 31
2015 2014 Revenue $ 4,548.6 $ 5,384.6 Cost and
expenses: Cost of revenue 4,251.2 5,072.3 Corporate general and
administrative expense 41.1 37.8 Interest expense, net 7.4
3.0 Total cost and expenses 4,299.7 5,113.1
Earnings before taxes 248.9 271.5 Income tax expense 83.3
78.2 Net earnings 165.6 193.3 Less: Net earnings
attributable to noncontrolling interests 21.5 44.2
Net earnings attributable to Fluor Corporation $ 144.1 $ 149.1
Basic earnings per share Net earnings $ 0.98 $ 0.93 Weighted
average shares 147.7 160.2 Diluted earnings per share Net earnings
$ 0.96 $ 0.92 Weighted average shares 149.9 162.4 New awards $
4,447.7 $ 10,668.5 Backlog $ 41,194.8 $ 40,162.6 Work performed $
4,419.0 $ 5,241.9
FLUOR CORPORATION
Unaudited
BUSINESS SEGMENT FINANCIAL REVIEW ($ in millions)
THREE MONTHS ENDED MARCH 31
2015
2014 (1)
Revenue Oil & Gas $ 2,471.6 $ 2,782.8 Industrial &
Infrastructure 1,080.2 1,615.7 Government 646.0 593.2 Global
Services 129.7 142.0 Power 221.1 250.9
Total revenue $ 4,548.6 $
5,384.6 Segment profit (loss) $ and margin
% Oil & Gas $ 183.3 7.4 % $ 139.1 5.0 % Industrial &
Infrastructure 71.1 6.6 % 97.2 6.0 % Government 14.8 2.3 % 12.5 2.1
% Global Services 15.3 11.8 % 20.7 14.6 % Power (2) (8.6 )
(3.9 )% (1.4 ) (0.6 )%
Total segment profit $ and margin
% $ 275.9 6.1 % $
268.1 5.0 % Corporate general and
administrative expense (41.1 ) (37.8 ) Interest expense, net (7.4 )
(3.0 ) Earnings attributable to noncontrolling interests
21.5 44.2
Earnings before taxes
$ 248.9 $ 271.5
(1) Effective January 1, 2015, the company implemented certain
organizational changes that impacted the composition of its
reportable segments. Revenue and segment profit for the Oil &
Gas, Industrial & Infrastructure and Global Services segments
in 2014 have been recast to reflect these changes.
(2) Includes research and development expenses associated with
NuScale totaling $17 million and $13 million for the three months
ended March 31, 2015 and 2014, respectively.
FLUOR CORPORATION Unaudited
SELECTED BALANCE SHEET ITEMS ($ in
millions, except per share amounts) MARCH 31,
DECEMBER 31, 2015 2014
Cash and marketable securities, including noncurrent $
2,211.6 $ 2,441.9 Total current assets 5,379.3 5,758.0 Total assets
7,619.2 8,194.4 Total short-term debt 27.7 28.7 Total current
liabilities 2,819.7 3,330.9 Long-term debt 992.2 991.7
Shareholders' equity 3,068.7 3,110.9 Total debt to
capitalization % (based on shareholders' equity) 24.9 % 24.7 %
Shareholders' equity per share $ 20.88 $ 20.93
SELECTED CASH FLOW ITEMS ($ in millions)
THREE MONTHS ENDED MARCH 31 2015
2014 Cash provided by operating
activities $
39.3 $
186.7
Investing activities Net (purchases) sales and maturities of
marketable securities 47.6 (45.6 ) Capital expenditures (73.9 )
(66.6 ) Proceeds from disposal of property, plant and equipment
29.9 24.6 Investments in partnerships and joint ventures (21.5 )
(5.0 ) Other items (0.2 ) (1.1 )
Cash utilized by
investing activities (18.1 )
(93.7 ) Financing activities Repurchase
of common stock (111.7 ) (192.3 ) Dividends paid (32.4 ) (26.0 )
Distributions paid to noncontrolling interests, net of capital
contributions (2.8 ) (15.9 ) Stock options exercised 0.9 14.1 Other
Items (8.0 ) (4.9 )
Cash utilized by financing
activities (154.0 ) (225.0
) Effect of exchange rate changes on cash
(49.0 ) (9.5 )
Decrease in cash and cash equivalents $
(181.8
) $
(141.5 ) Depreciation
$
47.8 $
48.5 FLUOR
CORPORATION Supplemental Fact Sheet Unaudited
NEW AWARDS ($ in millions) THREE
MONTHS ENDED MARCH 31
2015
2014 (1)
% Chg
Oil & Gas $ 2,903 65 % $ 8,850 83 % (67 )% Industrial
& Infrastructure 1,357 30 % 904 8 % 50 % Government 74 2 % 748
7 % (90 )% Power 114 3 % 166
2 % (31 )%
Total new awards $ 4,448
100 % $ 10,668
100 % (58 )%
BACKLOG TRENDS ($ in millions) AS OF
MARCH 31
2015 (2)
2014 (1)
% Chg
Oil & Gas $ 27,818 67 % $ 25,795 64 % 8 % Industrial
& Infrastructure 7,263 18 % 9,796 24 % (26 )% Government 4,171
10 % 2,648 7 % 58 % Power 1,943 5 %
1,924 5 % 1 %
Total backlog $
41,195 100 % $
40,163 100 % 3 %
United States $ 15,245 37 % $ 12,902 32 % 18 % The Americas
(excluding the United States) 11,426 28 % 13,703 34 % (17 )%
Europe, Africa and the Middle East 11,559 28 % 11,226 28 % 3 % Asia
Pacific (including Australia) 2,965 7 %
2,332 6 % 27 %
Total backlog $
41,195 100 % $
40,163 100 % 3 %
(1) Effective January 1, 2015, the company implemented certain
organizational changes that impacted the composition of its
reportable segments. New awards and backlog for the Oil & Gas
and Industrial & Infrastructure segments in 2014 have been
recast to reflect these changes.
(2) Backlog as of March 31, 2015 was reduced by approximately
$1.6 billion due to a strengthening U.S. dollar compared to most
major foreign currencies, of which $1.5 billion related to the Oil
& Gas segment.
Fluor CorporationMedia RelationsBrian Mershon,
469-398-7621orInvestor RelationsGeoff Telfer, 469-398-7070orJason
Landkamer, 469-398-7222
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