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Q1 2013 Earnings Call
May 02, 2013 5:30 pm ET
Kenneth H. Lockwood - Vice President of Corporate Finance and Investor Relations
David T. Seaton - Chairman, Chief Executive Officer and Chairman of Executive Committee
Biggs C. Porter - Chief Financial Officer and Senior Vice President
Jamie L. Cook - Crédit Suisse AG, Research Division
Mark Mihallo - Barclays Capital, Research Division
Ravi Gill - Goldman Sachs Group Inc., Research Division
Steven Fisher - UBS Investment Bank, Research Division
Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division
Tahira Afzal - KeyBanc Capital Markets Inc., Research Division
Alexander J. Rygiel - FBR Capital Markets & Co., Research Division
Michael S. Dudas - Sterne Agee & Leach Inc., Research Division
Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division
John B. Rogers - D.A. Davidson & Co., Research Division
Will Gabrielski - Lazard Capital Markets LLC, Research Division
Previous Statements by FLR
» Fluor Management Discusses Q4 2012 Results - Earnings Call Transcript
» Fluor Management Discusses Q3 2012 Results - Earnings Call Transcript
» Fluor Management Discusses Q2 2012 Results - Earnings Call Transcript
At this time, for opening remarks, I would like to turn the call over to Ken Lockwood, Vice President of Investor Relations. Please go ahead, Mr. Lockwood.
Kenneth H. Lockwood
Thanks very much, operator. Welcome, everyone, to Fluor's First Quarter 2013 Conference Call. With us today are David Seaton, Fluor's Chairman and Chief Executive Officer; and Biggs Porter, Fluor's Chief Financial Officer. Our earnings announcement was released this afternoon after the market closed, and we have posted a slide presentation on our website, which we will reference while making our prepared remarks.
Before getting started, I'd like to refer you to our Safe Harbor note regarding the forward-looking statements, which we have summarized on Slide 2. During today's call and slide presentation, we will be making forward-looking statements, which reflect our current analysis of existing trends and information. There is an inherent risk that actual results and experience could differ materially. You can find a discussion of our risk factors, which could potentially contribute to such differences, in the company's Form 10-Q, which was filed earlier today, and in the company's 10-K.
During this call, we may discuss certain non-GAAP financial measures. Reconciliations of these amounts with the comparable GAAP measures are reflected in our earnings release and are also posted in the Investor Relations section of our website at investor.fluor.com.
We've also updated and posted our factbook on our website, which includes a 3-year financial recast for the organizational realignment that went in effect with this quarter's reporting and will be discussed somewhat on today's call.
With that, I'll turn the call over to David Seaton, Fluor's Chairman and CEO. David?
David T. Seaton
Thanks, Ken. Good afternoon, and thank you to everyone for joining us today. Today, as Ken said, we'll be reviewing our first quarter results and discussing the trends we see through the remainder of 2013.
If you would turn to Slide 3, I'd like to begin by covering some of our highlights of the first quarter's financial performance. Net earnings attributable to Fluor for the quarter were $166 million or $1.02 per diluted share, which is up from $155 million or $0.91 per share in the first quarter 2012, which included the benefit of a lower tax rate. Consolidated segment profit for the quarter was $294 million, up 16% and $253 million a year ago. Segment profit results were driven by growth in Oil & Gas, Industrial & Infrastructure and Government segments. Oil & Gas segment profit was particularly strong, with first quarter results of $105 million, which is a 42% increase over last year. Consolidated revenue for the quarter was $7.2 billion, up 14% over last year, including a substantial increase in Oil & Gas. New awards for the quarter was strong at $6.5 billion, including $3.1 billion in Oil & Gas and $2.2 billion in Industrial & Infrastructure. Consolidated backlog was $37.5 billion, which is down from a year ago, primarily due to the downturn in the Mining & Metals market. More importantly, as we commented last quarter, we continue to see improving margins on our backlog, which is encouraging.
Our financial results are summarized on a table on Slide 4. I'll continue my remarks on Slide 5. Oil & Gas awards for the quarter included contracts for petrochemical facilities in the United States and China. Flour was selected by Dow Chemical for the expansion of their existing petrochemical facility in the Gulf Coast, including an ethylene cracker and associated power utilities and infrastructure facility upgrades. Ending Oil & Gas backlog was $18.6 billion, which is an increase of 11% from a year ago and a modest increase over last quarter. The Oil & Gas group continues to see strong demand for front-end engineering contracts, especially in petrochemical facilities, although expect new awards for the remainder of '13 to be fairly balanced across upstream, downstream and chemical markets.
Moving now to Industrial & Infrastructure. New awards for the quarter were $2.2 billion, including the Tappan Zee Bridge replacement in New York and the Horseshoe road project here in Dallas. Backlog declined to $16 billion compared to $23 billion a year ago as a result of continuing work-off associated with large mining projects, combined with the newer -- lower new award count over the past year. Now there were a number of news reports recently pertaining to issues and delays on various existing mining projects and new prospects, which are creating some challenge for 2013. We are close -- in close contact with these clients and continue to support their efforts. As a result of the organizational realignment that we noted in our earnings release, effective this quarter, financial results for Industrial & Infrastructure now include the operations and maintenance piece of the Global Services segment.