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Q3 2012 Earnings Call
November 01, 2012 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
Andy Kaplowitz - Barclays Capital, Research Division
Tahira Afzal - KeyBanc Capital Markets Inc., Research Division
George O'Leary - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division
Steven Fisher - UBS Investment Bank, Research Division
John D. Ellison - BB&T Capital Markets, Research Division
Michael S. Dudas - Sterne Agee & Leach Inc., Research Division
Brian Konigsberg - Vertical Research Partners, LLC
Alexander J. Rygiel - FBR Capital Markets & Co., Research Division
Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division
Will Gabrielski - Lazard Capital Markets LLC, Research Division
John Rogers - D.A. Davidson & Co., Research Division
Robert V. Connors - Stifel, Nicolaus & Co., Inc., Research Division
Previous Statements by FLR
» Fluor Management Discusses Q2 2012 Results - Earnings Call Transcript
» Fluor's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Fluor's CEO Discusses Q4 2011 Results - Earnings Call Transcript
At this time, for opening remarks, I would like to turn the call over to Ken Lockwood, Vice President of Corporate Finance and Investor Relations. Please go ahead, Mr. Lockwood.
Kenneth H. Lockwood
Thank you very much, operator, and welcome, everyone, to Fluor's Third Quarter 2012 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 forward-looking statements, which is summarized on Slide 2 of the presentation. 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 those risk factors in the company's Form 10-K, which was filed on February 22, 2012, and in our 10-Q, which was filed earlier today.
During this call, we may discuss certain non-GAAP financial measures, and reconciliations of these amounts with the comparable GAAP measures are reflected in our earnings release and are posted in the Investor Relations section of our website at investor.fluor.com.
So with that, I'd like to turn the call over to David Seaton, Fluor's Chairman and CEO. David?
David T. Seaton
Thanks, Ken, and good afternoon. And thank you, everyone, for joining us. Today, we'll review our third quarter results and discuss guidance for the balance of this year as well as our initial guidance for '13. But before we start, I know the storm has probably impacted many people on the phone quite a bit. Please note that you're in our thoughts and prayers, and hope for a speedy recovery from what is a really, really terrible storm.
To start, I'd like to start on Slide 3 and start with the third quarter. Net earnings attributable to Fluor for the quarter were $145 million or $0.86 per diluted share. Consolidated segment profit for the quarter was $278 million, which compares to $236 million a year ago. Our earnings results for the quarter were strong compared to last year, but they were impacted by a lower-than-expected award fee on the LOGCAP IV project, a higher-than-anticipated effective tax rate and foreign currency losses based on the U.S. dollar.
Consolidated revenue for the quarter was $7.1 billion, which is an increase of 18% over the $6 billion we reported a year ago. Third quarter new awards were sizable at $6.3 billion. Awards were very broad-based, with $2 billion in Oil & Gas awards, $2 billion in Government, $1.7 billion in Industrial & Infrastructure and $581 million in Power.
Consolidated backlog declined for the quarter to just under $41 billion due mainly to the removal of 2 mining projects, which totaled $2 billion.
Turning to Slide 4, Oil & Gas new awards for the quarter included a propylene production facility for Dow Chemical in Texas and a carbon capture and storage project for Shell in Canada. Following a successful FEED project, Fluor was also awarded a contract for Phase 3 of the Malampaya Deep Water Gas-to-Power project in the Philippines. Ending Oil & Gas backlog is now at $19.2 billion and represents a 31% increase over last year. We see continued strength in that market, as evidenced by a very active front-end FEED project slate that continues to track a number of new prospects across the oil, gas and petrochemical market globally. While we expect the natural gas prices in the U.S. remain attractive for petrochemical and other gas-related programs, the sluggish economy and an uncertain regulatory environment could delay our clients' investments and decision timeline.
The Industrial & Infrastructure segment posted third quarter new awards of $1.7 billion, including approximately $700 million for the I-95/395 managed toll lanes project in Virginia and a blood fractionation project in Georgia. Backlog at the end of the quarter was $16.2 billion, which is down about -- down from about $19 billion last quarter. This decline was driven by the recent softness in the mining new awards, strong revenue burn on existing projects and the removal of 2 significant projects from backlog, which we spoke of.