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Fluor Wins INVISTA Contract, Boosts Energy & Chemicals Arm
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Fluor Corporation’s (FLR - Free Report) has won an engineering, procurement and construction (EPC) contract from INVISTA to support the latter’s new 400 kilo-ton-per-annum adiponitrile (ADN) plant in Shanghai, China.
The work, which is expected to be completed by 2022 through its Energy & Chemicals business, will be performed at the Shanghai Chemical Industry Park. INVISTA recently completed a 215 kilo-ton-per-annum hexamethylenediamine or HMD plant and 150 kilo-ton-per-annum nylon 6,6 polymer plant. Notably, the company has booked the undisclosed value of the contract in fourth-quarter 2019.
Post completion of this project, the new plant will be combined with the existing HMD and polymer facilities. Moreover, the facility will serve customers directly with the key building blocks to produce nylon 6,6 and other high-value products that are significant for the production of a variety of goods in automotive, industrial, apparel and consumer electronics industries.
New Awards to Boost Fluor’s Business
Fluor has been providing EPC solutions for more than 40 years in China. Markedly, it will support INVISTA’s efforts to increase the production of ADN with its most-advanced technology to meet the growing demand within China and globally.
Recently, the company was selected as a project management consultant from Bharat Petroleum Corporation Limited to provide front-end engineering and design services to the latter’s Polyols Petrochemicals Project.
Again, it received a four-year framework contract from Neptune Energy for the latter’s brownfield and decommissioning project.
Meanwhile, shares of the company have started reviving in the recent past. It had been recording dismal results over the last few quarters, mainly due to unimpressive segmental performance. Nonetheless, the stock has gained 12.6% in the past three months against the Zacks Engineering - R And D Services industry’s 6.3% rally. Continuous contract wins, strong end-market prospects, solid backlog level and a good business portfolio mix are expected to drive growth in the future.
Energy & Chemicals Business to Drive Growth
Fluor, being an industry leader in nuclear remediation at government facilities throughout the United States, is expected to benefit from rising demand for energy across the globe. Relative stability in commodity prices is expected to boost investments in downstream and petrochemicals.
The Energy & Chemicals Business segment — which contributed nearly 41% to the company’s total revenues — had reported a profit of $84.9 million in third-quarter 2019, up 69.1% from a year ago. Quarter-end backlog also grew from the year-ago period.
Management is optimistic about the continuation of this trend of winning contracts in the upcoming days, which will likely drive its top line.
Zacks Rank
Fluor — which shares space with Gates Industrial Corporation plc (GTES - Free Report) , Quanta Services, Inc. (PWR - Free Report) and AECOM (ACM - Free Report) in the industry — currently carries a Zacks Rank #5 (Strong Sell).
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Fluor Wins INVISTA Contract, Boosts Energy & Chemicals Arm
Fluor Corporation’s (FLR - Free Report) has won an engineering, procurement and construction (EPC) contract from INVISTA to support the latter’s new 400 kilo-ton-per-annum adiponitrile (ADN) plant in Shanghai, China.
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The work, which is expected to be completed by 2022 through its Energy & Chemicals business, will be performed at the Shanghai Chemical Industry Park. INVISTA recently completed a 215 kilo-ton-per-annum hexamethylenediamine or HMD plant and 150 kilo-ton-per-annum nylon 6,6 polymer plant. Notably, the company has booked the undisclosed value of the contract in fourth-quarter 2019.
Post completion of this project, the new plant will be combined with the existing HMD and polymer facilities. Moreover, the facility will serve customers directly with the key building blocks to produce nylon 6,6 and other high-value products that are significant for the production of a variety of goods in automotive, industrial, apparel and consumer electronics industries.
New Awards to Boost Fluor’s Business
Fluor has been providing EPC solutions for more than 40 years in China. Markedly, it will support INVISTA’s efforts to increase the production of ADN with its most-advanced technology to meet the growing demand within China and globally.
Recently, the company was selected as a project management consultant from Bharat Petroleum Corporation Limited to provide front-end engineering and design services to the latter’s Polyols Petrochemicals Project.
Again, it received a four-year framework contract from Neptune Energy for the latter’s brownfield and decommissioning project.
Meanwhile, shares of the company have started reviving in the recent past. It had been recording dismal results over the last few quarters, mainly due to unimpressive segmental performance. Nonetheless, the stock has gained 12.6% in the past three months against the Zacks Engineering - R And D Services industry’s 6.3% rally. Continuous contract wins, strong end-market prospects, solid backlog level and a good business portfolio mix are expected to drive growth in the future.
Energy & Chemicals Business to Drive Growth
Fluor, being an industry leader in nuclear remediation at government facilities throughout the United States, is expected to benefit from rising demand for energy across the globe. Relative stability in commodity prices is expected to boost investments in downstream and petrochemicals.
The Energy & Chemicals Business segment — which contributed nearly 41% to the company’s total revenues — had reported a profit of $84.9 million in third-quarter 2019, up 69.1% from a year ago. Quarter-end backlog also grew from the year-ago period.
Management is optimistic about the continuation of this trend of winning contracts in the upcoming days, which will likely drive its top line.
Zacks Rank
Fluor — which shares space with Gates Industrial Corporation plc (GTES - Free Report) , Quanta Services, Inc. (PWR - Free Report) and AECOM (ACM - Free Report) in the industry — currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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