Fluor Corporation (NYSE: FLR) today announced financial results
for its second quarter ended June 30, 2016. Net earnings
attributable to Fluor for the second quarter were $102 million, or
$0.72 per diluted share, compared to $149 million, or $1.00 per
diluted share a year ago. Consolidated segment profit for the
quarter was $230 million, compared to $282 million a year ago.
Segment profit results reflect improvement in Industrial,
Infrastructure & Power, which was offset by a decline in
Energy, Chemicals & Mining due to lower mining activity and
forecast revisions on two projects. Second quarter revenue of $4.9
billion compares to $4.8 billion in the prior year.
New awards for the quarter were $6.4 billion, including $3.4
billion in Industrial, Infrastructure & Power, $1.2 billion in
Government, $1.2 billion in Energy, Chemicals & Mining and $664
million in Maintenance, Modification & Asset Integrity.
Consolidated ending backlog of $47.3 billion compares to $41.6
billion a year ago.
"The diversity of our end markets, along with our clients’ need
for capital-efficient, integrated solutions, contributed to our
backlog growth for the quarter," said Fluor Chairman and Chief
Executive Officer David Seaton. "While two projects held us back
for the quarter, we remain well positioned and are pleased to see
clients proceeding with their high-priority projects."
Corporate G&A expense for the second quarter of 2016 was $53
million, up from $48 million a year ago primarily due to
integration activities associated with the acquisition of Stork in
the first quarter. Fluor’s cash and marketable securities balance
at the end of the second quarter was $1.9 billion.
Outlook
Taking into consideration the lower than expected second quarter
results, the company is narrowing its 2016 guidance for EPS to a
range of $3.25 to $3.50 per diluted share, from the previous range
of $3.25 to $3.65 per diluted share.
Business Segments
Fluor’s Energy, Chemicals & Mining segment reported segment
profit of $126 million, compared to $229 million in the second
quarter of 2015. Results for the quarter reflect reduced activity
from mining and forecast revisions on two projects. Revenue of $2.5
billion declined from $3.3 billion a year ago primarily due to
lower mining activities. Second quarter new awards of $1.2 billion
include a $500 million bauxite mine in Guinea. Ending backlog was
$25 billion compared to $30 billion a year ago.
The Industrial, Infrastructure & Power segment reported
segment profit of $51 million, compared to $4 million in the second
quarter of 2015. Revenue for the segment increased 74 percent to $1
billion from $581 million a year ago. Results for the quarter
reflect increased execution activities on nuclear and gas-fired
power projects. New awards in the second quarter were
$3.4 billion including the Purple Line Project in Maryland and
the Greensville combined-cycle power plant in Virginia. Ending
backlog for the segment was $12.7 billion, up from $4.4 billion a
year ago.
The Government segment reported segment profit of $22 million,
compared to $17 million a year ago. Revenue for the quarter
was $658 million, compared to $603 million a year ago. Second
quarter new awards of $1.2 billion include task orders for LOGCAP
IV. Ending backlog was $5.8 billion, up from $4.3 billion a year
ago.
The Maintenance, Modification & Asset Integrity segment
reported segment profit of $31 million in the second quarter of
2016, flat when compared to a year ago. Revenue for the quarter was
$712 million compared to $363 million in the second quarter of
2015. Results for the quarter reflect contributions from the Stork
business, offset by declines in the equipment business line. New
awards totaled $664 million for the quarter, and ending backlog was
$3.7 billion, up from $2.8 billion a year ago.
Second Quarter Conference
Call
Fluor will host a conference call at 5:30 p.m. Eastern time on
Thursday, August 4, 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.
This press release contains a discussion of consolidated segment
profit that would be deemed a non-GAAP financial measure under SEC
rules. Segment profit is calculated as revenue less cost of revenue
and earnings attributable to noncontrolling interests excluding:
corporate general and administrative expense; interest expense;
interest income; domestic and foreign income taxes; other
non-operating income and expense items. The company believes that
consolidated segment profit provides a meaningful perspective on
its business results as it is the aggregation of individual segment
profit measures that the company utilizes to evaluate and manage
its business performance. A reconciliation of this measure to net
earnings attributable to Fluor Corporation is included in the press
release tables.
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is a global engineering,
procurement, fabrication, construction and maintenance company that
designs, builds and maintains capital-efficient facilities for its
clients on six continents. For more than a century, Fluor has
served our clients by delivering innovative and integrated
solutions across the globe. With headquarters in Irving, Texas,
Fluor ranks 155 on the FORTUNE 500 list with revenue of $18.1
billion in 2015 and has more than 60,000 employees worldwide. For
more information, please visit www.fluor.com or follow us 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," is “positioned” or other similar
expressions). These forward-looking statements, including
statements relating to future growth, backlog, earnings and the
outlook for the Company’s business 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 Energy,
Chemicals & Mining commodity-based segment; the Company's
failure to receive anticipated new contract awards; difficulties or
delays incurred in the execution of contracts, including those
caused by the performance of the Company’s clients, subcontractors,
suppliers and joint venture or teaming partners; failure of our
joint venture or other partners to perform their obligations;
failure to obtain favorable results in existing or future
litigation or dispute resolution proceedings or claims; client
delays or defaults in making payments; intense competition in the
industries in which we operate; current economic conditions
affecting our clients, partners, subcontractors and suppliers;
cyber-security breaches; failure to meet timely completion or
performance standards; liabilities arising from faulty services;
client cancellations of, or scope adjustments to, existing
contracts; risks or uncertainties associated with acquisitions,
dispositions and investments; risks arising from the inability to
successfully integrate acquired businesses; foreign economic and
political uncertainties; risks or uncertainties associated with
events outside of our control, including weather conditions; the
Company’s failure, or the failure of our agents or partners, to
comply with laws; the potential impact of certain tax matters;
possible information technology interruptions or inability to
protect intellectual property; liabilities associated with the
performance of nuclear services; 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; 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 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, 2016. 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 JUNE 30
2016 2015 Revenue $ 4,856.1 $ 4,810.1 Cost and
expenses: Cost of revenue 4,607.9 4,516.1 Corporate general and
administrative expense 52.6 47.8 Interest expense, net 14.2
7.4 Total cost and expenses 4,674.7 4,571.3
Earnings before taxes 181.4 238.8 Income tax expense 61.4
78.1 Net earnings 120.0 160.7 Less: Net earnings
attributable to noncontrolling interests 18.2 12.2
Net earnings attributable to Fluor Corporation $ 101.8 $ 148.5
Basic earnings per share: Net earnings $ 0.73 $ 1.02
Weighted average shares 139.2 146.3 Diluted earnings per
share: Net earnings $ 0.72 $ 1.00 Weighted average shares 140.8
147.9 New awards $ 6,431.8 $ 4,268.4 Backlog $
47,321.7
$ 41,592.0 Work performed $ 4,757.7 $ 4,684.7
FLUOR CORPORATION CONSOLIDATED
FINANCIAL RESULTS (in millions, except per share
amounts) Unaudited CONSOLIDATED OPERATING
RESULTS SIX MONTHS ENDED JUNE 30 2016
2015 Revenue $ 9,280.0 $ 9,358.8 Cost and expenses: Cost of
revenue 8,776.0 8,767.3 Corporate general and administrative
expense 107.7 88.9 Interest expense, net 25.7 14.9
Total cost and expenses 8,909.4 8,871.1 Earnings
before taxes 370.6 487.7 Income tax expense 131.6
161.4 Net earnings 239.0 326.3 Less: Net earnings attributable to
noncontrolling interests 32.9 33.7 Net earnings
attributable to Fluor Corporation $ 206.1 $ 292.6 Basic
earnings per share: Net earnings $ 1.48 $ 1.99 Weighted average
shares 139.1 147.0 Diluted earnings per share: Net earnings
$ 1.46 $ 1.96 Weighted average shares 140.8 148.9 New awards
$ 11,113.2 $ 8,716.1 Backlog $
47,321.7
$ 41,592.0 Work performed $ 9,069.1 $ 9,103.6
FLUOR CORPORATION Unaudited
BUSINESS SEGMENT
FINANCIAL REVIEW AND U.S. GAAP RECONCILIATION ($ in
millions) THREE MONTHS ENDED JUNE 30 2016
2015 (1)
Revenue Energy, Chemicals & Mining $ 2,476.4 $ 3,263.1
Industrial, Infrastructure & Power 1,010.0 580.9 Government
657.9 603.1 Maintenance, Modification & Asset Integrity
711.8 363.0
Total revenue $
4,856.1 $ 4,810.1
Segment profit $ and margin % (3) Energy, Chemicals
& Mining $ 125.5 5.1 % $ 229.4 7.0 % Industrial, Infrastructure
& Power (2) 51.4 5.1 % 4.4 0.8 % Government 22.0 3.3 % 17.2 2.9
% Maintenance, Modification & Asset Integrity 31.1
4.4 % 30.8 8.5 %
Total segment profit $ and
margin % $ 230.0 4.7 % $
281.8 5.9 % Corporate general and
administrative expense (52.6 ) (47.8 ) Interest expense, net (14.2
) (7.4 ) Income tax expense (61.4 ) (78.1 )
Net
earnings attributable to Fluor Corporation $
101.8 $ 148.5
SIX MONTHS ENDED JUNE 30 2016
2015 (1)
Revenue Energy, Chemicals & Mining $ 4,919.9 $ 6,245.8
Industrial, Infrastructure & Power 1,843.3 1,127.6 Government
1,343.9 1,249.1 Maintenance, Modification & Asset Integrity
1,172.9 736.3
Total revenue
$ 9,280.0 $ 9,358.8
Segment profit $ and margin % (3) Energy,
Chemicals & Mining $ 307.5 6.3 % $ 447.2 7.2 % Industrial,
Infrastructure & Power (2) 63.3 3.4 % 14.1 1.3 % Government
39.1 2.9 % 32.0 2.6 % Maintenance, Modification & Asset
Integrity 61.2 5.2 % 64.4 8.7 %
Total segment profit $ and
margin % $ 471.1 5.1 % $
557.7 6.0 % Corporate general and
administrative expense (107.7 ) (88.9 ) Interest expense, net (25.7
) (14.9 ) Income tax expense (131.6 ) (161.3 )
Net
earnings attributable to Fluor Corporation $
206.1 $ 292.6 (1) During
the first quarter of 2016, the company changed the composition of
its reportable segments to better reflect the diverse end markets
that the company serves. Segment operating information for 2015 has
been recast to reflect these changes. (2) Includes research
and development expenses associated with NuScale totaling $22
million and $48 million for the three and six months ended June 30,
2016, respectively and $19 million and $36 million for the three
and six months ended June 30, 2015, respectively. (3)
Segment profit margin % is calculated as segment profit divided by
segment revenue.
FLUOR CORPORATION
Unaudited SELECTED
BALANCE SHEET ITEMS ($ in millions, except per share
amounts) JUNE 30, DECEMBER 31, 2016
2015 Cash and marketable securities, including noncurrent $
1,915.9 $ 2,367.6 Total current assets 5,651.2 5,105.4
(1)
Total assets 9,241.5 7,625.4
(1)
Total short-term debt 166.1 - Total current liabilities 3,780.0
2,935.4 Long-term debt 1,547.5 986.6
(1)
Shareholders' equity 3,139.5 2,997.3
SELECTED CASH FLOW
ITEMS ($ in millions) SIX MONTHS ENDED JUNE
30 2016 2015 Cash provided by operating
activities $
90.5 $
204.2
Investing activities Net (purchases) sales and maturities of
marketable securities 129.6 38.2 Capital expenditures (107.3 )
(133.5 ) Proceeds from disposal of property, plant and equipment
39.0 54.9 Investments in partnerships and joint ventures (400.7 )
(47.5 ) Acquisitions, net of cash acquired (240.7 ) - Other items
7.1 0.9
Cash utilized by investing
activities (573.0 ) (87.0
) Financing activities Repurchase of common
stock (9.7 ) (214.3 ) Dividends paid (59.3 ) (63.5 ) Proceeds from
issuance of 1.75% Senior Notes 553.0 - Debt issuance costs (3.5 ) -
Repayment of Stork Notes, convertible debt and other borrowings
(332.5 ) (28.4 ) Borrowings under revolving lines of credit 883.8 -
Repayment of borrowings under revolving lines of credit (851.6 ) -
Distributions paid to noncontrolling interests, net of capital
contributions(16.3) (39.5 ) Other Items 4.5
(10.7 )
Cash provided (utilized) by financing activities
168.4 (356.4 )
Effect of exchange rate changes on cash (8.7
) (30.2 ) Decrease in cash
and cash equivalents $
(322.8 ) $
(269.4
) Depreciation $
101.4
$
94.7 (1) Certain amounts in 2015 have
been reclassified to conform to the 2016 presentation due to the
implementation of new accounting pronouncements.
FLUOR CORPORATION Supplemental Fact Sheet
Unaudited NEW AWARDS ($ in
millions) THREE MONTHS ENDED JUNE 30
2016
2015 (1)
Energy, Chemicals & Mining $ 1,173 18 % $ 2,845 67 %
Industrial, Infrastructure & Power 3,354 52 % 93 2 % Government
1,241 19 % 726 17 % Maintenance, Modification & Asset Integrity
664 11 % 604 14 %
Total new awards $ 6,432
100 % $ 4,268 100
% SIX MONTHS ENDED JUNE 30 2015
2015 (1)
Energy, Chemicals & Mining $ 1,752 16 % $ 6,194 71 %
Industrial, Infrastructure & Power 4,786 43 % 622 7 %
Government 3,506 31 % 800 9 % Maintenance, Modification & Asset
Integrity 1,069 10 % 1,100
13 %
Total new awards $ 11,113
100 % $ 8,716
100 % BACKLOG TRENDS
($ in millions) AS OF JUNE 30
2016
2015 (1)
Energy, Chemicals & Mining $ 25,118 53 % $ 30,039 72 %
Industrial, Infrastructure & Power 12,694 27 % 4,398 11 %
Government 5,816 12 % 4,306 10 % Maintenance, Modification &
Asset Integrity 3,694 8 % 2,849
7 %
Total backlog $ 47,322
100 % $ 41,592
100 % United States $ 21,517 45 % $ 14,284 34
% The Americas (excluding the United States) 8,849 19 % 11,703 28 %
Europe, Africa and the Middle East 14,469 31 % 12,333 30 % Asia
Pacific (including Australia) 2,487 5 %
3,272 8 %
Total backlog $ 47,322
100 % $ 41,592
100 % (1) During the first quarter of
2016, the company changed the composition of its reportable
segments to better reflect the diverse end markets that the company
serves. New awards and backlog for 2015 have been recast to reflect
these changes.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160804006336/en/
Fluor CorporationMedia RelationsBrian Mershon,
469-398-7621orBrett Turner, 864-281-6976orInvestor RelationsGeoff
Telfer, 469-398-7070orJason Landkamer, 469-398-7222
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