Fluor(US:FLR)2025-11-07 14:30Financial Data and Key Metrics Changes - Revenue for Q3 was $3.4 billion, including a $653 million revenue reversal in energy solutions due to litigation [4] - Consolidated new awards for Q3 totaled $3.3 billion, with 99% being reimbursable [4] - Adjusted EBITDA for Q3 was $161 million, compared to $124 million a year ago, and adjusted EPS was $0.68 compared to $0.51 in 2024 [17][24] - The company ended the quarter with $2.8 billion in cash and marketable securities, up $500 million from June 30 [19] Business Segment Data and Key Metrics Changes - Urban Solutions reported a profit of $61 million in Q3, with new awards totaling $1.8 billion, a significant increase from $828 million in the same period last year [5] - Energy Solutions reported a segment loss of $533 million compared to a profit of $50 million a year ago, primarily due to the $653 million court ruling [7] - Mission Solutions reported a segment profit of $34 million for Q3, down from $45 million a year ago, with new awards totaling $1.3 billion compared to $274 million a year ago [10] Market Data and Key Metrics Changes - The total backlog remains around $28 billion, with 82% being reimbursable [4] - The company anticipates significant contributions from Urban Solutions, particularly in metals and mining, and expects a Q4 award for a pharmaceutical facility [7][11] - Energy transition projects have slowed down due to market conditions, while traditional oil and gas activities are picking up [15][58] Company Strategy and Development Direction - The company is transitioning to an asset-light model with a majority reimbursable backlog, aiming for long-term growth [4] - The monetization of the NuScale investment is expected to enhance financial discipline and capital allocation [13][24] - The company is focusing on strategic relationships rather than competitive bidding for new projects, particularly in power generation and data centers [34][46] Management's Comments on Operating Environment and Future Outlook - Management noted that external factors have caused delays in new awards, impacting EBITDA growth rates [14][15] - The company expects to approach $90 billion in new awards over the four-year planning cycle ending in 2028, with most awards concentrated in 2026-2028 [14][59] - The outlook for 2026 suggests EBITDA generation may be marginally better than the guidance for 2025, with a potential shift in growth targets to 2029 [26][59] Other Important Information - The company plans to deploy an additional $800 million in share repurchases through February [23] - The anticipated payment to Santos for the court ruling will be funded from cash generated from core operations [30][54] - The company is actively pursuing opportunities in various sectors, including mining, power generation, and data centers [33][35] Q&A Session Summary Question: Insights on 2026 EBITDA expectations - Management indicated that 2026 EBITDA is expected to be marginally better than 2025, driven by growth in Urban Solutions and the resumption of work in Mexico [27][29] Question: Clarification on Energy Solutions margins - The margins in Energy Solutions, excluding Santos, showed strong performance due to the nearing completion of LNG Canada and resumption of work in Mexico [29] Question: Funding for Santos payment - The Santos payment is expected to be funded from cash on the balance sheet generated from core operations, not from NuScale proceeds [30] Question: Opportunities in power generation and data centers - The company is focusing on strategic relationships for power generation projects and is well-positioned for larger data center projects despite challenging terms in the U.S. [34][35] Question: Competitive landscape for $90 billion potential awards - The competitive set is favorable, with many projects already in progress, particularly in mining and metals, and a focus on negotiated contracts rather than competitive bidding [45][46]