Fluor Corporation (NYSE:FLR) Q4 2024 Earnings Conference Call February 18, 2025 8:30 AM ET Company Participants Jason Landkamer - VP, IR David Constable - Chairman & CEO James Breuer - COO Joseph Brennan - CFO John Regan - Chief Accounting Officer Conference Call Participants Michael Dudas - Vertical Research Sangita Jain - KeyBanc Capital Markets Jamie Cook - Truist Securities Andrew Wittmann - Robert W. Baird Steven Fisher - UBS Brent Thielman - D.A. Davidson Operator Good morning, and welcome to Fluor's ...

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].

Financial Performance - Revenue for 2024 was $16.3 billion, with net income attributable to Fluor of $2.1 billion, or $12.30 per diluted share[2] - Consolidated segment profit for the year was $635 million, up from $537 million in 2023[2] - Adjusted EBITDA for 2024 was $530 million, with adjusted diluted earnings per share of $2.32[2] - Net earnings attributable to Fluor for the year ended December 31, 2024, were $2,145 million, compared to $139 million in 2023, marking a significant increase[26] - Adjusted EBITDA for the year ended December 31, 2024, was $530 million, down from $613 million in 2023[28] - The diluted EPS available to Fluor common stockholders for the year ended December 31, 2024, was $12.30, compared to $0.54 in 2023[26] Revenue and Awards - Full year new awards totaled $15.1 billion, with an ending backlog of $28.5 billion, of which 79% is reimbursable[3] - Total new awards for the year 2024 amounted to $15,123 million, a decrease from $19,528 million in 2023[23] - The backlog at the end of 2024 was $28,484 million, slightly down from $29,441 million at the end of 2023[23] Segment Performance - Urban Solutions segment revenue increased to $7.2 billion, with new awards of $9.5 billion in 2024[10] - Energy Solutions segment revenue decreased to $6.0 billion, with new awards totaling $3.2 billion[11] - Urban Solutions segment revenue increased to $1,999 million in Q4 2024 from $1,420 million in Q4 2023, representing a 40.6% growth[23] Cash Flow and Financial Position - Strong operating cash flow for 2024 was $828 million, the highest since 2015[2] - Cash and marketable securities at the end of 2024 were $3.0 billion, a 14% increase from 2023[3] - Operating cash flow for the year 2024 was $828 million, significantly higher than $212 million in 2023[24] Quarterly Performance - Fourth quarter revenue was $4.3 billion, compared to $3.8 billion in the same quarter of 2023[6] - Total revenue for Q4 2024 reached $4,260 million, a 11.5% increase from $3,820 million in Q4 2023[23] - The total segment profit margin for Q4 2024 was 4.8%, up from 2.2% in Q4 2023[23] Guidance - Adjusted EBITDA guidance for 2025 is set at $575 to $675 million, with adjusted EPS guidance of $2.25 to $2.75 per share[9] Foreign Currency Impact - The company reported a foreign currency gain of $34 million in Q4 2024, compared to a loss of $36 million in Q4 2023[24]

The construction sector is experiencing a whirlwind, given the various factors, favorable or unfavorable, affecting its different industries. On a favorable note, increased infrastructure spending, improved demand for energy transition and low-carbon projects, improved housing demand and operational efficiency efforts are likely to have offered solid grounds for top-line growth. On the other hand, a mortgage rate lingering between 6% and 7% (during the October-December 2024 period), seasonal impacts, ongoin ...

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]

Fluor Corporation (FLR) has been facing mounting challenges that raise concerns about its near-term performance and strategic direction. Recently, the company noticed tepidness in its Energy Solutions business, which compelled it to reduce earnings and EBITDA guidance for the year.Despite efforts to streamline its operations and diversify its portfolio, the company’s persistent execution issues, foreign currency risks, and project delays diminish its attractiveness.Although FLR’s shares have outperformed th ...

A double miss on quarterly results sent investors heading for the exit lane. Veteran engineering and industrial conglomerate Fluor (FLR -13.57%) couldn't engineer good news for its shareholders on Friday. That morning the company unveiled its latest set of quarterly figures, and the market just didn't like the looks of them. Fluor's share price fell by nearly 14%, on a day when the benchmark S&P 500 index was in the black with a 0.3% increase. Disappointing third-quarter fundamentals Fluor divulged that its ...

Fluor Corporation’s (FLR) shares dipped 12.3% in the pre-market trading session on Friday. Investors’ sentiments got hurt after it reported lower-than-expected results for third-quarter 2024.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Earnings missed the Zacks Consensus Estimate and declined from the prior year with lower-than-expected contributions from the Energy Solutions segment. Revenues also missed the consensus mark but increased from the previous year.FLR noted that sinc ...