) reported fourth-quarter and full-fiscal 2013 results yesterday
on Feb, 18, after market closed. The company reported
fourth-quarter net earnings of $167 million or $1.01 per share,
beating the Zacks Consensus Estimate of 98 cents by 3.1%. During
the fourth quarter of 2012, the company reported a loss of $4
million or 3 cents per share.
Profits during the fourth quarter of 2013 primarily driven by
growth in the Oil & Gas as well as the Government and Global
services, were partially offset by the sluggish mining and metals
For fiscal 2013, the company reported earnings of $688 million
or $4.06 a share, which also surpassed the Zacks Consensus
Estimate of $4.03 a share by 0.7%. Annual earnings were also up
from the prior-year earnings of $456 million or $2.71 a share.
Strong performance in the Oil & Gas, Power and Government
segments drove the top-line growth.
Total revenue for the fourth quarter came in at $6.3 billion,
compared with $7.0 billion in fourth-quarter of 2012, reflecting
a 10.4% decline. The contraction was primarily attributable to
the sluggish performance of the mining and metals business under
the Industrial & Infrastructure segment. Revenues fell short
of the Zacks Consensus Estimate of $6.7 billion.
In the reported quarter, the company inked contracts worth
$5.8 billion. This included $4.2 billion in the Oil & Gas
segment and $1.1 billion in the Government segment. Consolidated
backlog was $34.9 billion at quarter-end, down from $38.2 billion
in the fourth quarter of 2012, primarily due to the downturn in
the mining and metals market.
For full-year 2013, consolidated revenue declined marginally
by 0.8% to $27.4 billion from $27.6 million in fiscal 2012. The
decline was attributable to weakness in the Industrial &
Infrastructure, Government and Global services, partially offset
by strong growth in the Oil & Gas and Power segments.
New awards for fiscal 2013 were $25.1 billion, comprising
$12.9 billion in Oil & Gas, $6.6 billion in Industrial &
Infrastructure, $4.1 billion in Government and $1.5 billion in
Power. Consolidated backlog at end of the year was $34.9 billion,
compared with $38.2 billion a year ago, reflecting a continued
decline in awards in the mining and metals business and
cancellation of a large copper/gold project in South America in
Revenues from the
Oil & Gas segment
reported year-over-year growth of 14.3% to $3.0 billion, while
segment profits rose 35.1% to $121.6 million. Revenues were
primarily driven by increased contributions from upstream and
petrochemical projects. In the fourth quarter, the segment booked
new awards of $4.2 billion, including the North West Redwater
refinery upgrader project in Canada and additional scope on a
major upstream gas processing project in Kazakhstan.
For fiscal 2013, the segment reported 21% increase in revenue
to $11.5 billion. For the full year, new awards totaled $12.9
billion, compared with $12.6 billion in 2012, while backlog grew
10% from a year ago to $20.0 billion.
Revenues in the
Industrial & Infrastructure
came in at $2.2 billion, down from $3.1 billion in the past year,
with segment profit coming in at $87.4 million compared with a
loss of $213.1 million in the fourth quarter of 2012. The
declines in revenues and profits were due to lackluster
performance from the mining and metals business line contrary to
healthy performance of the industrial services and infrastructure
businesses in the quarter.
New awards in the fourth quarter amounted to $340 million
including a number of maintenance contract renewals. Backlog at
the end of the year declined to $10.5 billion from $17.2 billion
a year ago, resulting from lesser new awards in mining and metals
and the cancellation of a large copper/gold project in the fourth
quarter which totaled $1.8 billion.
For fiscal 2013, total revenue for the segment declined 16% to
$11.1 billion, primarily due to lower contributions from the
mining and metals business line. However, the segment profit
increased 169% to $476 million from $177 million in 2012. Segment
profit essentially reflects favorable performance of the
industrial services business, offset by a decline in mining and
metals. New awards in 2013 were valued at $6.6 billion, including
approximately $2 billion in infrastructure and $3 billion in
mining and metals awards, down from a total of $10.4 billion in
reported a year-over-year revenue decline of 18.3% to $648.1
million. However, the segment's profit increased 33.4% year over
year to $68.7 million. For the quarter, new awards were worth
$1.1 billion, which included $983 million for the unfunded
portion of multi-year government contracts at Savannah River and
The Government group reported revenues of $2.7 billion,
declining 18.2% year over year from $3.3 billion. Lower revenues
were primarily attributable to a reduction in task order volume
in the LOGCAP IV contract in Afghanistan. The segment profit was
up 7.3% to $161 million from $150 million a year ago, driven by
contributions of $57 million from the favorable resolution of
several issues that spanned multiple years.
New awards for 2013 amounted to $4.1 billion for the year,
compared with $3.2 billion in 2012. Backlog at the end of the
year was $2.4 billion, including $983 million for the unfunded
portion of multi-year contracts.
Revenues in the
Global Services segment
for the fourth quarter reduced 10.6% to $157.8 million, while the
segment's profit improved to $39.9 million from $25.2 million in
the past year.
For the full year, revenues for the segment declined 10% to
$612 million, due to lower contributions from the equipment
business line. Segment profit was $120 million in 2013, including
expenses of approximately $5 million related to the company's
construction and fabrication initiatives.
Power Group segment,
for the fourth quarter, reported revenues of $281.9 million
compared with $290.6 million in the past year, marginally
declining by 3%. The segment's profit increased to $0.3 million
from a loss of $2.5 million in the prior-year quarter. New
contracts in the quarter totaled $146 million, which included
early engineering on a proposed nuclear facility and renewal of
several power maintenance contracts.
For 2013, Power Group reported revenue growth of 65% to $1.4
billion compared with $841 million a year ago. The revenue
increase was attributable to construction progress on solar and
gas-fired projects. For the year, the segment recorded profit of
$12 million which included expenses of $53 million, associated
with the company's continued investment in NuScale. New awards
for the year were worth $1.5 billion, compared with $884 million
a year ago, while backlog was $2.0 billion, compared with $1.9
billion a year ago.
Exiting the year, cash and marketable securities, amounted to
$2.7 billion versus $2.6 billion as on Dec 31, 2012. The
long-term debt also reduced to $496.5 million from $520.2 million
at year-end 2012. Shareholders' equity increased to $3.8 billion
form $3.3 billion on Dec 31, 2012. However, the
debt-to-capitalization ratio reduced to 12.1% from 13.9% in Dec,
Fluor is positive about its strong prospects for continued
growth, especially in Oil & Gas. However, the company is
reiterating its previously announced range of $4.10-$4.60 per
diluted share as its EPS guidance for 2014.
Fluor currently holds a Zacks Rank #2 (Buy). Other stocks
worth considering in the sector include
AECOM Technology Corp.
Quanta Services, Inc.
Orion Marine Group Inc.
), all of which carry a Zacks Rank #2.
AECOM TECH CORP (ACM): Free Stock Analysis
FLUOR CORP-NEW (FLR): Free Stock Analysis
ORION MARINE GP (ORN): Free Stock Analysis
QUANTA SERVICES (PWR): Free Stock Analysis
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