Fluor(US:FLR)2025-05-02 13:32Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $4 billion, with consolidated new awards of $5.8 billion, leading to a book to burn ratio of 1.5 [7][27] - Total backlog increased to $28.7 billion, with 79% being reimbursable [8] - Adjusted EBITDA for Q1 was $155 million, compared to $88 million a year ago, and adjusted EPS was $0.73 compared to $0.47 in the previous year [21][22] Business Segment Data and Key Metrics Changes - Urban Solutions segment reported a profit of $70 million, with new awards of $5.3 billion, up from $4.9 billion a year ago [8][9] - Energy Solutions segment profit decreased to $47 million from $68 million a year ago, with new awards totaling $315 million [14] - Mission Solutions reported a profit of $5 million, down from $22 million a year ago, impacted by a $28 million reserve related to a long-standing claim [17] Market Data and Key Metrics Changes - Significant awards in life sciences and infrastructure contributed to backlog, while scope reductions on two large projects offset some gains [8] - New awards in infrastructure included a $682 million construction contract for TxDOT [13] - The company is tracking opportunities in pharmaceuticals, advanced manufacturing, and semiconductor spaces [11][12] Company Strategy and Development Direction - The company is transitioning from a "fix and build" strategy to a "grow and execute" strategy for 2025 to 2028, focusing on generating cash and earnings [5][6] - Plans to pursue bolt-on acquisitions to enhance technical capabilities in target markets [6] - Emphasis on maintaining strong client relationships and project delivery to create stakeholder value [6] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are looking for clarity in the market before making final investment decisions, particularly in energy and copper projects [19] - Despite some clients being price-sensitive, many projects are proceeding as planned, especially in the ATLS and mission solutions areas [19][37] - The company remains confident in its backlog and the ability to convert projects into revenue, despite potential delays [56][62] Other Important Information - The company plans to repurchase up to $600 million in shares for 2025, with $142 million spent in Q1 [26] - Cash and marketable securities at the end of Q1 were $2.5 billion, a decrease of over $400 million from year-end [23] - Operating cash flow for Q1 was an outflow of $286 million, compared to an outflow of $111 million a year ago [24] Q&A Session Summary Question: Client sentiment changes and project sensitivity - Management indicated that projects in urban solutions are moving forward, while energy projects require more certainty [36][37] Question: EBITDA guidance and revenue growth - Management acknowledged the impact of stock price on earnings and expressed confidence in the outlook for the year [45][46] Question: Dow project delay and potential underutilization - Management clarified that while some projects may experience delays, they do not expect significant underutilization [58][60] Question: Urban Solutions segment and profit recognition - Management confirmed that an $84 million benefit recognized was not included in segment profit results [70] Question: Legacy projects in Mexico - Management expressed confidence in ongoing projects in Mexico and indicated limited forward-looking exposure [90][91]