Fluor(US:FLR)2022-05-06 15:34Financial Data and Key Metrics Changes - For Q1 2022, revenue was $3.1 billion, which was lighter than anticipated due to seasonality and COVID-related slowdowns [23] - Segment profit nearly doubled to $115 million compared to 2021, driven by a favorable settlement related to a contract in Puerto Rico and increased execution activity on energy solution projects [23] - Diluted adjusted earnings per share for the quarter were $0.16, with tax expenses impacted by jurisdictional earnings recognition [24] Business Line Data and Key Metrics Changes - Urban Solutions reported segment profit of $15 million, affected by cost growth on an advanced manufacturing project and timing of a P3 transaction [8] - Mining and Metals has over $6 billion in new work opportunities, including projects in South America and a decarbonization program for a steel company [9] - Mission Solutions reported segment profit of $58 million, benefiting from a favorable resolution of a U.S. Army Corps of Engineers project [12] - Energy Solutions achieved a segment profit of $54 million, reflecting increased execution activities and a reduction in overhead costs [14] Market Data and Key Metrics Changes - The overall energy market has shifted, with clients assessing capital allocation needs for energy security and transition, despite rising oil prices [16] - Significant prospects include a large international petrochemical facility and additional refinery work in Mexico [16] Company Strategy and Development Direction - The company is focused on executing current road and bridge projects, with optimism regarding federal infrastructure funding supporting future opportunities [10] - Advanced Technologies and Life Sciences are seeing increased interest in semiconductor manufacturing and data centers, with multiple projects for Intel and discussions on multibillion-dollar opportunities [11] - The company aims to maintain a strong, flexible balance sheet to support EBIT-generating activities and is on track to capture $97 million in ongoing savings through its cost optimization program [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about new awards, with Q1 new awards totaling $1.9 billion and expectations for significant improvement in the second quarter [7] - The pipeline for new awards is strong, with broad-based opportunities across various sectors, including government, mining, and energy transition [38][39] - Management remains confident in achieving the 2024 guidance of $2.50 to $2.90 per share, supported by strong execution and a healthy backlog [21] Other Important Information - The company has made the decision to cease operations in Russia and is winding down current projects there due to the ongoing crisis in Ukraine [7] - Fluor's ownership in NuScale Power is now 57%, with significant investor interest following its recent listing on the NYSE [18] Q&A Session Summary Question: Can you elaborate on the booking margins and pipeline? - Management noted a strong pipeline with booking margins exceeding expectations by 470 basis points, indicating a positive outlook for the year [37][39] Question: What are the opportunities in the semiconductor business? - Management highlighted strong relationships with key manufacturers and a competitive edge in delivering large-scale semiconductor facilities [42][43] Question: How is the LNG Canada project progressing? - The LNG Canada project is over 60% complete, with good progress on module deliveries despite some COVID-related challenges [53][55] Question: What is the outlook for new awards and backlog? - Management expects to see a book-to-burn ratio above 1.0 by the end of Q2, with several significant projects anticipated to contribute to backlog [68] Question: How are terms and conditions shaping up for new projects? - Management reported favorable terms and conditions in negotiations, allowing for a balanced risk profile in contracts [83]