Fluor's Earnings Beat Estimate - Analyst Blog

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Fluor Corporation ( FLR ) reported first-quarter 2013 earnings per share of $1.02, 6.3% higher than the Zacks Consensus Estimate of 96 cents. Quarterly earnings were up 12.1% year over year from 91 cents a share. Profits during the first quarter were driven by growth in the Oil & Gas and Industrial & Infrastructure segments.

Total Revenue

Total revenue was $7.2 billion in first quarter 2013 compared with $6.3 billion in the fourth quarter of 2012, reflecting a 14.2% increase. The robust growth in the top line was primarily attributable to strong performance in the oil & gas sector.   

New awards for the quarter were strong at $6.5 billion. This included $3.1 billion in Oil & Gas and $2.2 billion in Industrial & Infrastructure. Consolidated backlog was $37.5 billion, which is down year over year, primarily due to the downturn in the Mining & Metals market.

Segment Revenue

Revenues from the Oil & Gas segment reported revenue growth of 36% to $2.8 billion from $2.0 billion last year. Revenues were primarily driven by increasing contributions from upstream and petrochemical projects. New awards for the segment were $3.1 billion in the quarter, which included petrochemical projects in the United States and China. Backlog at the end of the first quarter was $18.6 billion, up 11% from $16.8 billion a year ago.

Revenues in the Industrial & Infrastructure segment came in at $3.1 billion versus $3.0 billion a year ago. The marginal improvement was driven by increased contributions from the infrastructure business line. New awards for the segment totaled $2.2 billion in the first quarter, primarily driven by large infrastructure programs, including the Tappan Zee Bridge in New York and the Horseshoe road project in Texas. Backlog at the end of the quarter was $16.0 billion versus $23.3 billion a year ago, mainly due to reduced mining and metals awards over the past year.

Due to an organizational realignment in the quarter, financial results for the Industrial & Infrastructure segment now include the operations and maintenance business line, which was previously reported as part of the Global Services segment.

Government segment reported revenue decline of 12% to $751 million compared with $850 million in the prior-year quarter. Revenues for the quarter were impacted by lower LOGCAP IV task order volume and lower activity levels at the Savannah River site for the Department of Energy.

New awards for the segment totaled $756 million in the first quarter, driven primarily by the timing of the release of LOGCAP IV task orders in Afghanistan. Backlog at the end of the quarter was $964 million compared with $695 million a year ago.

Revenues in the Global Services segment contracted 18% to $150 million in the quarter. Decline in the top line was attributable to reduced contributions from the equipment business line.

Since the operations and maintenance business line is now reported as part of the Industrial & Infrastructure segment, currently there are no new awards or backlog for the Global Services segment.

Fluor's Power group reported revenues of $383 million compared with $175 million a year ago, reflecting 119% growth due to progress on gas-fired and solar projects. New awards for the quarter were $448 million. This includes an extension of a long-term fossil power maintenance contract in Texas and the award of an engineering, procurement and construction contract for a solar facility in Calif. Segment backlog was $1.9 billion, up from $1.8 billion in the first quarter of 2012.

Income & Expenses

Consolidated segment profit for the first quarter was $294 million, primarily driven by growth in the Oil & Gas and Industrial & Infrastructure segments.  

Earnings before taxes were $306.3 million during the quarter compared with $240.8 million at the end of the prior-year quarter. Total cost and expenses for the quarter amounted to $6.9 billion compared with $6.0 billion in the prior-year quarter.

Balance Sheet & Cash Flow

Cash and marketable securities, including non-current, amounted to $2.49 billion at the end of the year compared with $2.31 billion at the end of 2012. Long-term debt was $496.3 million compared with $520.2 million and shareholders' equity was $3.48 billion compared with $3.34 billion in the year-ago quarter.

Outlook

The company maintained its 2013 earnings per share guidance of $3.85 - $4.35. Fluor derives significant benefits from diverse end-markets.

Acting through its subsidiaries, Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis. It serves a diverse set of industries worldwide, including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government.

Fluor currently has a Zacks Rank #2 (Buy). In addition, some other companies in the same sector that are worth considering at the moment are Chicago Bridge & Iron ( CBI ), Orion Marine Group Inc . ( ORN ) and Quanta Services Inc . ( PWR ), all having Zacks Rank #2 (Buy). 



CHICAGO BRIDGE (CBI): Free Stock Analysis Report

FLUOR CORP-NEW (FLR): Free Stock Analysis Report

ORION MARINE GP (ORN): Free Stock Analysis Report

QUANTA SERVICES (PWR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CBI , FLR , ORN , PWR

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