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Fluor Corporation (FLR - Analyst Report) is slated to release its third-quarter 2012 earnings results on Thursday, November 1, 2012. The current Zacks Consensus Estimate for third-quarter earnings per share (EPS) is 97 cents, representing annualized growth of 24.36%.

FLR’s earnings were above the Zacks Consensus Estimate in first and second quarters of 2012 and also in the fourth quarter of 2011 while earnings were below the Estimate in the third quarter of 2011. The company’s average positive earnings surprise for the trailing four quarters was 2.35%.

Third Quarter Highlights

FLIR Systems reported its second-quarter 2012 earnings from continuing operations of $0.95, 3.3% higher than the Zacks Consensus Estimate of $0.92 and up 1.1% from the prior-year earnings of $0.94. Profits during the quarter were driven by end-market diversification and strong international presence.

Total revenue for the quarter grew 18.1% year over year to $7.1 billion on the back of higher revenues across all the company’s segments. Total backlog as of June 30, 2012, was about $43.0 billion compared with $2.7 billion as of June 30, 2011.

Revenue from the Oil & Gas segment increased by 16% year over year, driven by an improvement in the upstream business. Industrial & Infrastructure revenue was up 29.2% due to increased mining and metals businesses. Government segment revenue was up 2.7% while Global Services revenue declined by 0.6%. Power segment revenue was flat year over year, impacted by a relatively weak demand for new power generation.

Agreement of Estimate Revisions  

None of the analysts have either increased or decreased their estimates in the last 7 or 30 days.

Magnitude of Estimate Revisions  

In the last 7 or 30 days, there was no change in earnings estimate for the third-quarter 2012, fourth-quarter 2012, full-year 2012 or full-year 2013.

Our Take  

Fluor’s favorable contract mix, diverse service offerings and strong relationships around the world allow it to sustain operating margin going forward relative to its peers without diminishing growth potential.

Driven by the company’s strong performance in the second quarter, management had raised the lower end of its 2012 earnings guidance. Earnings per share are now expected in the range of $3.50 to $3.80, up from $3.40 to $3.80 projected earlier. The company’s solid earnings and strong new awards and backlog are favorable factors.

Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis. It serves a diverse set of industries worldwide including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government.

Fluor performs operations and maintenance activities for major industrial clients and, in some cases, operate and maintain their equipment fleet. The company’s prime competitor is Jacob’s Engineering Group (JEC - Analyst Report).

We continue to maintain a Neutral rating on Fluor for the long term. The company has a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.

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