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Fluor (FLR) Secures Contract From Dow, Increases Backlog
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Fluor Corporation (FLR - Free Report) has secured a reimbursable contract from Dow for the first-ever net-zero carbon emissions ethylene cracker and derivatives complex in Fort Saskatchewan, Alberta, Canada. The company will deliver front-end engineering and design (FEED) services that it will book in first-quarter 2023 and anticipates delivering additional engineering, procurement and construction management (EPCM) services throughout this year depending on the final investment decision by Dow’s board of directors.
This project is expected to decarbonize about 20% of Dow’s global ethylene capacity along with increasing its polyethylene supply by about 15%. The additional section of the contract expects Fluor to deliver combined project management team services for the entire Fort Saskatchewan Path2Zero program along with EPCM services for ethylene cracker and related utilities, power and infrastructure.
In this context, Fluor’s Energy Solutions business, group president Jim Breuer, said, “Fluor’s expertise in energy transition is helping clients across industries reduce greenhouse gas emissions and improve energy efficiency.”
Fluor’s Growth Prospects
Shares of FLR have risen 37.7% in the past six months, outperforming the Zacks Engineering - R and D Services industry’s growth of 15.9%.
Image Source: Zacks Investment Research
Fluor’s long-term prospects remain strong with existing growth opportunities in renewable energy, gas-fired combined cycle generation and air emissions compliance projects for existing coal-fired power plants. Further, in a cut-throat competitive environment, Fluor continuously emphasizes cost controls to deliver not only the performance requirements specified by its clients but also meet their budgetary needs.
During third-quarter 2022, its Energy Solutions business received new awards comprising two reimbursable contracts, totaling more than $2 billion for BASF, ethylene oxide, and ethylene glycol and infrastructure off-sites and utility packages in China. Fluor was also awarded a $600 million award for a refinery upgrade in Mexico with its joint venture partner, ICA.
Fluor's total new awards for the quarter came in at $9,743 million compared with $3,401 million in the year-ago period. Consolidated backlog at the end of the quarter came in at $25.42 billion, up from $20.8 billion at 2021-end. This indicates the growth prospects of the company.
Skyline currently carries a Zacks Rank #2. SKY has a trailing four-quarter earnings surprise of 43.2%, on average. Its shares have rallied 40.6% in the past three months.
The Zacks Consensus Estimate for SKY’s fiscal 2023 sales and EPS suggests growth of 19% and 55.7%, respectively, from the year-ago levels.
United Rentals currently carries a Zacks Rank #2. Shares of URI have gained 50% in the past six months. The long-term earnings growth rate of the company is 16.3%.
The Zacks Consensus Estimate for URI’s 2023 sales and EPS suggests growth of 20.3% and 28.3%, respectively, from the year-ago period’s reported levels.
Sterling currently carries a Zacks Rank #2. STRL has a trailing four-quarter earnings surprise of 20%, on average. Shares of the company have gained 48.6% in the past six months.
The Zacks Consensus Estimate for STRL’s fiscal 2023 sales and EPS suggests growth of 0.6% and 9.9%, respectively.
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Fluor (FLR) Secures Contract From Dow, Increases Backlog
Fluor Corporation (FLR - Free Report) has secured a reimbursable contract from Dow for the first-ever net-zero carbon emissions ethylene cracker and derivatives complex in Fort Saskatchewan, Alberta, Canada. The company will deliver front-end engineering and design (FEED) services that it will book in first-quarter 2023 and anticipates delivering additional engineering, procurement and construction management (EPCM) services throughout this year depending on the final investment decision by Dow’s board of directors.
This project is expected to decarbonize about 20% of Dow’s global ethylene capacity along with increasing its polyethylene supply by about 15%. The additional section of the contract expects Fluor to deliver combined project management team services for the entire Fort Saskatchewan Path2Zero program along with EPCM services for ethylene cracker and related utilities, power and infrastructure.
In this context, Fluor’s Energy Solutions business, group president Jim Breuer, said, “Fluor’s expertise in energy transition is helping clients across industries reduce greenhouse gas emissions and improve energy efficiency.”
Fluor’s Growth Prospects
Shares of FLR have risen 37.7% in the past six months, outperforming the Zacks Engineering - R and D Services industry’s growth of 15.9%.
Image Source: Zacks Investment Research
Fluor’s long-term prospects remain strong with existing growth opportunities in renewable energy, gas-fired combined cycle generation and air emissions compliance projects for existing coal-fired power plants. Further, in a cut-throat competitive environment, Fluor continuously emphasizes cost controls to deliver not only the performance requirements specified by its clients but also meet their budgetary needs.
During third-quarter 2022, its Energy Solutions business received new awards comprising two reimbursable contracts, totaling more than $2 billion for BASF, ethylene oxide, and ethylene glycol and infrastructure off-sites and utility packages in China. Fluor was also awarded a $600 million award for a refinery upgrade in Mexico with its joint venture partner, ICA.
Fluor's total new awards for the quarter came in at $9,743 million compared with $3,401 million in the year-ago period. Consolidated backlog at the end of the quarter came in at $25.42 billion, up from $20.8 billion at 2021-end. This indicates the growth prospects of the company.
Zacks Rank & Other Key Picks
FLR currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks in the Zacks Construction sector are Skyline Champion Corporation (SKY - Free Report) , United Rentals, Inc. (URI - Free Report) and Sterling Infrastructure, Inc. (STRL - Free Report) .
Skyline currently carries a Zacks Rank #2. SKY has a trailing four-quarter earnings surprise of 43.2%, on average. Its shares have rallied 40.6% in the past three months.
The Zacks Consensus Estimate for SKY’s fiscal 2023 sales and EPS suggests growth of 19% and 55.7%, respectively, from the year-ago levels.
United Rentals currently carries a Zacks Rank #2. Shares of URI have gained 50% in the past six months. The long-term earnings growth rate of the company is 16.3%.
The Zacks Consensus Estimate for URI’s 2023 sales and EPS suggests growth of 20.3% and 28.3%, respectively, from the year-ago period’s reported levels.
Sterling currently carries a Zacks Rank #2. STRL has a trailing four-quarter earnings surprise of 20%, on average. Shares of the company have gained 48.6% in the past six months.
The Zacks Consensus Estimate for STRL’s fiscal 2023 sales and EPS suggests growth of 0.6% and 9.9%, respectively.