Fluor(US:FLR)2023-08-04 16:51Financial Data and Key Metrics Changes - Revenue for Q2 2023 was $3.9 billion, representing a 20% increase from the previous year, driven by execution activities in Energy Solutions, Urban Solutions, and Mission Solutions [22][37] - Adjusted EBITDA for the quarter was $181 million, compared to $68 million a year ago, with adjusted EPS rising to $0.76 from $0.15 in Q2 2022 [23][22] - Cash and marketable securities balance was $2.1 billion, with positive operating cash flow of $62 million for the quarter [24] Business Segment Data and Key Metrics Changes - Urban Solutions reported a profit of $76 million, with new awards totaling $2.3 billion and a backlog of $11.7 billion, 58% of which is reimbursable [6] - Mining & Metals is advancing critical minerals production, including lithium projects in North America and Europe [12] - Advanced Technologies & Life Sciences secured a $574 million award for a new life sciences facility and a $487 million expansion for a biotech facility in Denmark [13] - Mission Solutions reported a segment profit of $40 million, up from $28 million a year ago, driven by increased activities in European logistics support [42] Market Data and Key Metrics Changes - New awards for the quarter totaled $3.7 billion, with a total backlog of $25.5 billion, 64% of which is reimbursable [11][50] - The company is tracking approximately $49 billion in key EPC and EPCM prospects across various sectors [38] Company Strategy and Development Direction - The company is focused on expanding its portfolio in semiconductor work and energy transition projects, with a robust prospect pipeline estimated at $300 billion [38][67] - A strategic partnership with Tech Mahindra aims to enhance digital transformation and support client demand for digital handovers [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, supported by a strong prospect pipeline and improved margins on new awards [20][51] - The company anticipates continued positive cash flow trends and has raised its adjusted earnings per share guidance for 2023 to a range of $2 to $2.30 [51] Other Important Information - The DOJ has closed its investigation of the company without bringing charges, which is a positive development for the company [24] - The company is well-positioned for future nuclear remediation opportunities with the DOE [16] Q&A Session Summary Question: Guidance for the back half of the year - Management indicated that the guidance reflects a run rate of $140 million to $160 million, with expectations for a positive trend moving forward [28] Question: Terms and conditions of projects and margin expectations - Management noted that new awards are coming in at margins 200 basis points above the current backlog margin, indicating strong margin power for 2024 [30] Question: Impact of claims resolution on guidance - Management clarified that the guidance does not factor in additional claims resolution activities until a better assessment is made [61] Question: Visibility on new awards for the second half of the year - Management expressed confidence in the visibility of new awards, with many projects ready to move forward [108] Question: Financial profile and balance sheet update - Management confirmed plans to address the 2024 notes and ongoing discussions regarding monetization of NuScale [89] Question: Energy transition projects and margin performance - Management highlighted significant activity in energy transition projects, including carbon capture and lithium projects, which are expected to enhance margin performance [90]