Will Fluor Corporation (FLR) Miss on Earnings? - Analyst Blog


Fluor Corporation ( FLR ) is set to report third-quarter 2013 results on Oct 31 after market closes. Last quarter it posted a 2.97% negative surprise. Let's see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Fluor Corporation posted modest top-line and bottom-line results during the second quarter of 2013, with its earnings increasing 3.1% year over year and revenues growing just 1.6% year over year. During the second quarter, the company largely benefited from a significant rise in Oil & Gas and Power revenues. This was partially offset by declines in the company's mining and metals business. Moreover, uncertain economic conditions and tough competitive environment remain a matter of concern. Fluor Corporation has a strong presence and brand name in executing front-end engineering and design (FEED) contracts and the engineering, procurement and construction (EPC) contracts in large petrochemical and petroleum companies. During the third quarter, the company largely benefited from a significant rise in Oil & Gas and Power projects. However, the company's mining and metals business continued to be slow during the quarter.

Earnings Whispers?

Our proven model does not conclusively show that Fluor Corporation is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP  and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP:   That is because the Most Accurate estimate stands at $1.01 while the Zacks Consensus Estimate is higher at $1.03. That is a difference of -1.94%.

Zacks Rank: Fluor Corporation's Zacks  Rank #3 (Hold) lowers the predictive power of ESP because the Zacks  Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Universal Forest products Inc . ( UFPI ), has Earnings ESP of 17.65% and Zacks Rank #1 (Strong Buy).

Boise Cascade Co . ( BCC ), has Earnings ESP of 5.56% and Zacks Rank #2 (Buy).

Rayonier Inc. ( RYN ), has Earnings ESP of 2.13% and Zacks Rank #2 (Buy).

BOISE CASCADE (BCC): Free Stock Analysis Report

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

RAYONIER INC (RYN): Free Stock Analysis Report

UNIVL FST PRODS (UFPI): Free Stock Analysis Report

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Zacks Investment Research

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: BCC , FLR , RYN , UFPI



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