Fluor Corporation (FLR) led joint venture (JV), including Worley, Kazakh Institute of Oil and Gas and KazGiproNefteTrans Engineering Company, has successfully supported the completion and startup of Tengizchevroil’s (“TCO”) Future Growth Project (FGP).This revolutionary project at the Tengiz oil field in Kazakhstan has been supported by the Fluor-led joint venture since 2011, encompassing a series of engineering, procurement, construction, operations and maintenance services.FLR stock climbed 3% during Tues ...

Core Insights - Fluor Corporation (FLR) shares fell 8.4% following the release of disappointing fourth-quarter 2024 earnings, which missed expectations and declined from the previous year [1][2] Financial Performance - Adjusted earnings per share (EPS) for Q4 were 48 cents, missing the Zacks Consensus Estimate of 78 cents by 38.5%, and down 29.4% from 68 cents a year ago [4] - Quarterly revenues were $4.26 billion, missing the consensus mark of $4.72 billion by 9.8%, but increased 11.5% from $3.82 billion in the same quarter last year [4] - The company's segment profit rose to $206 million from $85 million a year ago, with a segment margin of 4.8%, up from 2.2% [5] Segment Performance - Energy Solutions segment revenues increased 6.9% year over year to $1.52 billion, with a margin of 4.1%, up from 1.8% [6] - Urban Solutions segment revenues totaled $2 billion, up 40.8% year over year, but the margin decreased to 4.1% from 10.4% [7] - Mission Solutions segment revenues were $654 million, up 1.2% from $646 million, with a margin improvement to 6.9% from 4.8% [8] - The Other segment generated revenues of $87 million, down from $332 million a year ago, but turned a profit of $17 million compared to a loss of $119 million [9] Annual Overview - For the full year 2024, Fluor reported revenues of $16.32 billion, a 5.4% increase from $15.47 billion in 2023, while adjusted EPS decreased to $2.32 from $2.73 [10] - Adjusted EBITDA for the year was down 13.5% to $530 million from $613 million [10] Guidance for 2025 - Fluor expects adjusted EPS for 2025 to be in the range of $2.25-$2.75, with full-year revenues projected to grow approximately 15% year over year [12] - Adjusted EBITDA is anticipated to be between $575 million and $675 million, with G&A expenses expected to be about $180 million [12] - Segment margin percentages for 2025 are projected to be 3.5-4.5% for Energy Solutions, 4-5% for Urban Solutions, and 5-6% for Mission Solutions [12]

Fluor (FLR -8.41%) published its final earnings report for 2024 on Tuesday, and investors reacted by trading the company's stock down aggressively. This resulted in a nearly 9% share-price erosion on the day, a performance that was notably worse than the 0.2% gain of the bellwether S&P 500 index.Headline numbers going in different directionsFluor's fourth quarter of that year saw the engineering and construction conglomerate earn $4.26 billion, 11% higher than in the same period of 2023. Going in the other ...

U.S. stocks traded lower toward the end of trading, with the Nasdaq Composite falling around 100 points on Tuesday.The Dow traded down 0.38% to 44,378.28 while the NASDAQ fell 0.47% to 19,932.75. The S&P 500 also fell, dropping, 0.16% to 6,105.15.Check This Out: Top 3 Risk Off Stocks Which Could Rescue Your Portfolio This QuarterLeading and Lagging SectorsEnergy shares jumped by 1.8% on Tuesday.In trading on Tuesday, communication services shares fell by 1%.Top HeadlineThe NY Empire State Manufacturing Inde ...

Financial Data and Key Metrics Changes - Fluor reported revenue of $16.3 billion for 2024, marking a 5.4% increase from 2023 [13] - Net income for the year was $2.1 billion, equating to $12.30 per diluted share [40] - Adjusted EBITDA for the year was $530 million, with segment profit totaling $635 million [42] - Cash and cash equivalents, along with marketable securities, increased by 14% to $3 billion [44] Business Line Data and Key Metrics Changes - Urban Solutions segment reported a profit of $81 million for the quarter, down from $147 million a year ago, with new awards totaling $1.4 billion [20] - Energy Solutions reported a fourth quarter segment profit of $63 million, significantly up from $26 million in 2023 [28] - Mission Solutions reported a segment profit of $45 million in the fourth quarter, compared to $31 million a year ago [36] Market Data and Key Metrics Changes - The ending backlog for Urban Solutions grew by 20% to $17.7 billion, while Energy Solutions' backlog decreased to $7.6 billion from $9.7 billion a year ago [29][20] - The company noted a healthy book-to-burn ratio of just under 1 for new awards in 2024, with 85% of new awards being reimbursable [14] Company Strategy and Development Direction - The company is transitioning to a "grow and execute" strategy, focusing on revised growth targets and project delivery [11] - Fluor is tracking opportunities in various sectors, including domestic energy, key minerals production, and AI infrastructure development, which are seen as favorable for its business segments [16] - The company aims to leverage its expertise in power generation to support the growing demand from data centers [80] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong cash flow and a robust capital structure [10] - The company anticipates a significant increase in demand for data centers and related power generation solutions [81] - Management highlighted the importance of maintaining strong relationships with clients and adapting to market demands [19] Other Important Information - The company plans to target an additional $300 million in share repurchases during 2025 [46] - Fluor's investment in NuScale was deconsolidated, resulting in a $1.6 billion pretax gain [49] Q&A Session Summary Question: Outlook for 2025 and book-to-bill ratio - Management indicated a book-to-bill ratio significantly above 1 for 2025, with strong opportunities in Urban Solutions and Energy Solutions [66][69] Question: Data center cycle compared to life sciences - Management noted they are in the early phases of the data center cycle, with significant investments expected from major players [74][79] Question: Update on NuScale monetization - Management confirmed ongoing negotiations for monetization, emphasizing the importance of getting the process right for long-term success [87][90] Question: Federal government contracts and spending freezes - Management reassured that critical government contracts, particularly in national security and energy, are expected to continue despite spending freezes [93][96] Question: LNG Canada project cost increases - Management acknowledged additional resources were expended on insulation work but confirmed the project remains on track for first cargo delivery [105][106] Question: Energy Solutions margins and cash flow guidance - Management explained that the guidance reflects a pivot from legacy projects to demand-driven growth, with expectations for improved margins in the latter half of the year [108][111]

Revenue and Earnings - Total revenue for 2024 was $16,315 million, an increase of 5.4% from $15,474 million in 2023[215]. - Net earnings attributable to Fluor were $2,145 million in 2024, compared to $139 million in 2023, representing a significant increase[215]. - Equity method earnings for 2024 were $2,105 million, with a net effective tax rate of 18% on these earnings[219]. - Operating cash flow for 2024 was $828 million, a significant increase from $212 million in 2023, driven by decreased working capital and customer payments[257][259]. - The company received $367 million in distributions from joint ventures and $169 million in tax refunds from the IRS during 2024[259]. Segment Performance - Urban Solutions segment revenue increased to $7,239 million in 2024, up 37.6% from $5,262 million in 2023[215]. - The Urban Solutions segment's profit margin was 4.2% in 2024, compared to 5.1% in 2023[215]. - Mission Solutions revenue declined slightly in 2024 due to the cancellation of a project in late 2023[232]. - Segment profit and profit margin improved in 2024, driven by the recognition of a $30 million charge in 2023 for a completed weapons facility project[233]. - Segment profit in 2024 declined primarily due to inflation-adjusted variable consideration and cost growth, totaling $66 million in charges from a construction subcontract in Mexico[230]. - Segment profit in the fourth quarter of 2024 increased significantly, reflecting $33 million for cost growth on a completed large upstream legacy project[231]. Backlog and Awards - Total backlog as of December 31, 2024, was $28,484 million, a decrease from $29,441 million in 2023[215]. - New awards in 2024 totaled $15,123 million, down from $19,528 million in 2023[215]. - New awards and backlog decreased in 2024, with backlog at $665 million compared to $2.7 billion in 2023, reflecting a slowdown in new award activity[234]. - The company reported a backlog of $702 million for ongoing legacy projects in a loss position as of December 31, 2024, compared to $1.3 billion in 2023, with estimated unfunded losses of $237 million[258]. Financial Position - Cash and cash equivalents combined with marketable securities increased to $3.0 billion in 2024 from $2.6 billion in 2023[253]. - As of December 31, 2024, letters of credit totaling $483 million were outstanding under a $1.8 billion credit facility, which was amended to $2.2 billion[252]. - As of December 31, 2024, letters of credit totaling $483 million were outstanding under committed lines of credit, and $944 million under uncommitted lines of credit[269]. - The maximum potential future payments under outstanding performance guarantees were estimated to be $16 billion as of December 31, 2024[270]. Capital Expenditures and Asset Sales - Capital expenditures in 2024 totaled $164 million, primarily for improvements to a new office lease in Houston[257][261]. - Proceeds from the sale of assets in 2024 included $67 million from the sale of Stork's European business[261]. Stock Repurchase and Corporate Actions - In December 2024, the company repurchased and canceled 2,353,280 shares of common stock for $125 million, with over 28 million shares remaining available for repurchase as of December 31, 2024[255][263]. - The company has a stock repurchase program authorized to purchase shares in the open market, with an additional 20 million shares authorized in November 2024[263]. - The company incurred a $7 million severance charge related to the closure of Stork operations in Trinidad and Tobago[213]. - A pre-tax gain of $1.6 billion was recognized in Q4 2024 from the deconsolidation of NuScale[214]. - The company expects the results of the Stork segment to be immaterial in 2025 following the completion of its U.K. operations sale[237].

Core Viewpoint - Fluor Corporation (FLR) is set to report its fourth-quarter 2024 results on February 18, with expectations of revenue growth driven by its primary segments despite recent earnings misses [1][2]. Financial Performance - In the last reported quarter, Fluor's adjusted earnings per share (EPS) and revenues missed the Zacks Consensus Estimate by 34.6% and 14.6%, respectively, with a year-over-year revenue growth of 3.3% and a 50% decline in the bottom line [2]. - The Zacks Consensus Estimate for the upcoming fourth-quarter EPS has decreased to 78 cents from 79 cents, indicating a 14.7% year-over-year growth from 68 cents, while the revenue estimate is $4.72 billion, reflecting a 23.6% increase from $3.82 billion reported in the same quarter last year [4]. Revenue Drivers - Revenue growth is expected to be supported by increased contributions from the Energy Solutions, Urban Solutions, and Mission Solutions segments, driven by demand for traditional energy, energy transition, low-carbon power projects, and defense projects [5]. - The Energy Solutions segment is estimated to generate $1.64 billion in revenues, up from $1.42 billion a year ago, while Urban Solutions is expected to reach $2.06 billion, an increase from $1.42 billion [7]. - The Mission Solutions segment is projected to report revenues of $711 million, up from $646 million, while the Other segment is expected to decline to $315 million from $332 million [7][8]. Margin Analysis - Fluor's bottom line is anticipated to have improved year-over-year due to effective execution of its "Building a Better Future" strategy and a focus on cost-plus/low-risk bookings, despite facing higher costs and macroeconomic challenges [9]. - The profit estimates for the Energy Solutions and Mission Solutions segments are $52 million and $50 million, respectively, showing growth from $26 million and $31 million year-over-year [10]. - The Urban Solutions segment profit is expected to decline to $70 million from $147 million, while the Other segment is projected to report a loss of $25 million, significantly improved from a loss of $119 million in the previous year [11]. Earnings Prediction - The current Zacks model indicates that Fluor does not have a strong prediction for an earnings beat, with an Earnings ESP of -8.09% and a Zacks Rank of 4 (Sell) [12][13].

Core Insights - Fluor Corporation has secured a joint venture contract with Hatch for BHP's Olympic Dam Smelter & Refinery Expansion Project, which is a significant opportunity to enhance its mining and metals business [1] - The project is contingent on BHP's final investment decision expected in the first half of 2027, with Fluor recognizing its share of the contract value in Q4 2024 [2] - The expansion aligns with rising global copper demand, with BHP aiming to increase refined copper cathode production to over 500,000 tonnes by the early 2030s and potentially 650,000 tonnes by the mid-2030s [3] Company Growth Potential - Fluor's involvement in the Olympic Dam expansion positions the company to benefit from sustained mining infrastructure spending, particularly as copper is essential for electric vehicles and renewable energy [4] - The contract enhances Fluor's pipeline of high-value projects, potentially leading to substantial revenue growth if BHP proceeds with full-scale expansion [5] - The strategic partnership with BHP may drive long-term shareholder value, especially given the increasing importance of copper in a decarbonizing world [5] Financial Performance - Fluor's shares have gained 27.7% over the past year, outperforming the Zacks Engineering - R and D Services industry's growth of 13.4% [8] - The company secured new awards worth $2.7 billion in Q3 2024, with a consolidated backlog of $31.32 billion, reflecting a 20.5% increase from $26 billion a year ago [10] - Strong demand for Fluor's services has pushed new award margins above its strategic segment margin range of 4-6% [11]

Company Overview - Fluor Corporation (NYSE: FLR) is a prominent global EPC (Engineering, Procurement, and Construction) player with exposure to attractive end-markets such as datacenter, nuclear, metals & mining, life sciences, and Federal sectors [2] Industry Exposure - The company operates in a wide range of high-growth and strategic end-markets, positioning it well for future opportunities [2] - Key sectors include datacenter infrastructure, nuclear energy, metals & mining, life sciences, and Federal projects [2]

Core Viewpoint - Fluor Corporation is facing significant challenges that impact its near-term performance and strategic direction, particularly in its Energy Solutions business, leading to reduced earnings and EBITDA guidance for the year [1][5][12] Financial Performance - In Q3 2024, Fluor's earnings declined by 50% year-over-year, primarily due to lower-than-expected contributions from the Energy Solutions segment, which saw its margin decrease from 7% to 2.9% [5][6] - The company has adjusted its earnings per share (EPS) guidance to a range of $2.55-$2.75, down from a previous expectation of $2.50-$3.00, which is below the 2023 reported figure of $2.73 [6] - Adjusted EBITDA guidance has been lowered to $525-$575 million from $625-$675 million, reflecting project cancellations and timing of revenue recognition [6][12] - The Zacks Consensus Estimate for 2024 EPS is currently at $2.62, indicating a 4% decline year-over-year [7] Operational Challenges - Significant project delays and cancellations are undermining Fluor's growth, including the cancellation of a large semiconductor manufacturing project in the U.S. [8][9] - The company has a backlog of $859 million across five projects, which poses ongoing risks due to limited conversion into EPC awards and muted margins [10] - Execution risks are highlighted by delayed revenue recognition in the Energy Solutions segment and cost overruns in Mexico [9][11] Margin and Currency Issues - The Energy Solutions segment experienced weaker margins in Q3 due to lower-than-expected project contributions, compounded by an increased effective tax rate from higher revenues in high-tax jurisdictions [11] - Foreign currency volatility continues to create unpredictability in earnings, with derivative gains being one-off benefits rather than sustainable contributions [11] Strategic Outlook - Fluor's ongoing execution issues, weak financial performance, and reliance on uncertain growth drivers present a concerning outlook, despite efforts to diversify its portfolio [12] - The lack of clear growth catalysts and persistent operational inefficiencies contribute to its classification as a high-risk investment [12]