Fluor Corporation FLR announced that the U.S. Department of Energy has extended the tenure of decontamination and decommissioning contract on the existing Portsmouth Gaseous Diffusion Plant ("GDP") in Piketon, OH. The deal is extended for an additional 30 months and Fluor will book its share of the approximately $850 million contract value in the third quarter of 2018.
Fluor, together with BWX Technologies, Inc. BWXT
and Jacobs Engineering Group Inc. JEC
, will execute the contract as Fluor-BWXT Portsmouth, LLC, a Fluor-led partnership company.
Per the deal, Fluor-BWXT will provide deactivation, demolition and disposal of all GDP facilities, process-related ancillary facilities, along with environmental remediation, uranium stewardship, and community outreach programs. The deal was started as a five-year work on Mar 28, 2011, which was extended in April 2016 for 30 months. Contract Wins to Bolster Government Business
Fluor enjoys a solid track record of contracts, and management remains optimistic about the continuation of this trend in the future, which is expected to drive the company's growth.
The company's Government segment, accounting for more than 17% of total revenues, has been performing well courtesy of a solid track record of contracts. Over the past few quarters, major wins in the government business have allowed Fluor to expand long-term recurring revenue opportunities.
Revenues at the Government segment soared 45% year over year to $2.19 billion in the first half of 2018. The business received new awards of $785 million in the second quarter, including task orders for LOGCAP IV in Afghanistan. The company's backlog was $2.3 billion as of Jun 30, 2018.
In July, Fluor's marine propulsion business, Fluor Marine Propulsion LLC, secured a contract from the U.S. Navy for naval nuclear propulsion work at the Naval Nuclear Laboratory. The contract is worth $1.22 billion and incorporates options, which if exercised, would bring the cumulative estimated value of this contract to $13.1 billion. Share Price Performance
Shares of Fluor, a Zacks Rank #1 (Strong Buy) company, have outperformed the industry
over the past year. Its shares have gained 38.7% in the said time frame compared with the industry's growth of 2.4%. The outperformance was backed by a solid earnings surprise history, having surpassed the consensus mark in three of the past four quarters, with the average being 3.3%. Earnings estimates for 2018 and 2019 have also been trending upward over the past 60 days, reflecting analysts' optimism surrounding the company's growth prospects. You can see the complete list of today's Zacks #1 Rank stocks here
Despite intense competition from industry peers like KBR, Inc. KBR and others, long-term prospects of Fluor remain impressive on the back of strong end-market potential.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Jacobs Engineering Group Inc. (JEC): Free Stock Analysis Report BWX Technologies, Inc. (BWXT): Free Stock Analysis Report Fluor Corporation (FLR): Free Stock Analysis Report KBR, Inc. (KBR): Free Stock Analysis Report To read this article on Zacks.com click here.