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Fluor's (FLR) Q1 Earnings Beat, Revenues Miss Estimates

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Fluor Corporation (FLR - Free Report) reported first-quarter results, with earnings surpassing the Zacks Consensus Estimate but revenues missing the same. Earnings beat the Zacks Consensus Estimate in two of the trailing three quarters, while revenues missed the same for the third consecutive quarter.

Following the results, shares of the company gained 0.3% during the pre-market trading session on May 7.

David Constable, chief executive officer of Fluor, said, "Results for the quarter were consistent with our expectations as we start to work past the effects of COVID-19 on our projects and operations.”

Inside the Headlines

For first-quarter 2021, the company reported adjusted earnings of 7 cents per share, beating the Zacks Consensus Estimate of 1 cent. In the prior-year quarter, it reported earnings of 35 cents per share.

Fluor Corporation Price, Consensus and EPS Surprise

Fluor Corporation Price, Consensus and EPS Surprise

Fluor Corporation price-consensus-eps-surprise-chart | Fluor Corporation Quote

Quarterly revenues of $2,938.5 million missed the consensus mark of $3,151 million and decreased 20.5% from the year-ago level of $3,697.7 million. The downside was primarily caused by lower contribution from Energy & Chemicals as well as Urban Solution segments.

Fluor's total new awards for the quarter came in at $3.7 billion compared with $3.8 billion a year ago.

Consolidated backlog at quarter-end came in at $23.8 billion, up from $23.1 billion a year ago.

Segmental Discussions

The company has changed the composition of its segments to implement new strategy and pursue opportunities. Fluor now reports results in four reportable segments as follows: Energy Solutions, Urban Solutions, Mission Solutions and Other.

Energy & Chemicals segment’s revenues fell 27.1% year over year to $991 million for the quarter. The downside was due to $29 million expense related to an embedded foreign currency derivative and lower execution activity on certain projects. For the quarter, the segment reported a profit of $2.2 million against loss of $5.9 million a year ago. New awards came in at $1.6 billion, up from $1.5 billion in the first quarter of 2020. Backlog at quarter-end was $11.1 billion compared with $11 billion in the year-ago period.

Revenues in the Urban Solutions segment totaled $1.2 billion, down 25% on a year-over-year basis. The downside was primarily due to the impacts of COVID delays on a large mining project in South America, the nearing completion of two data center projects in Europe and forecast revisions on two infrastructure projects. Segment profit came in at $29.8 million, down from $51.3 million a year ago. New awards came in at $1.1 billion, down from $1.6 billion a year ago. Backlog at quarter-end was $9.7 billion compared with $9.2 billion in first-quarter 2020.

Revenues in the Mission Solutions segment totaled $753.3 million, up 1% on a year-over-year basis. The segment reported a profit of $43.6 million versus $32.1 million a year ago. Notably, the company benefited from favorable contract modifications, increased execution activity in Department of Energy projects and an increase in performance scores on several projects. The segment booked new awards worth $991.8 million, up from $684 million a year ago. Backlog at quarter-end was $3 billion compared with $2.9 billion in the year-ago period.

The Other segment — comprised of NuScale — recognized expenses of $15 million in the first quarter compared with $13 million a year ago. The segment incurred operating loss of $15.7 million versus $22.8 million loss a year ago.

2021 Guidance

For 2021, Fluor expects adjusted earnings per share in the range of 50-80 cents compared with the consensus mark of 97 cents. However, the guidance excludes NuScale expenses, and impacts of foreign currency exchange as well as restructuring or impairments.

Meanwhile, the company remains optimistic about receiving new awards in second-half 2021, subject to improvement in post-pandemic capital spending.

Zacks Rank

Fluor — which shares space with Jacobs Engineering Group Inc. (J - Free Report) , AECOM (ACM - Free Report) and KBR, Inc. (KBR - Free Report) in the Zacks Engineering - R and D Services industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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