Fluor Corporation (FLR Quick QuoteFLR - Free Report) reported stellar results for second-quarter 2023, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate and increased from the previous year, given solid demand for its engineering and construction solutions.

Given the strong underlying performance of the company’s non-legacy portfolio and large Energy Solutions projects, Fluor lifted its expectations for 2023.

The company’s shares spiked 8.4% on Aug 4 in the pre-market trading session post the earnings release.

Fluor Corporation Price, Consensus and EPS Surprise

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

Inside the Headlines

Fluor reported adjusted earnings per share (EPS) of 76 cents, which handily beat the consensus estimate of 36 cents by 111.1%. The reported figure increased significantly by 406.7% from 15 cents a year ago.

Quarterly revenues of $3,939 million topped the consensus mark of $3,612 million by 9.1%. The reported figure increased 19.4% from the year-ago level. The upside was primarily attributable to strong contributions from Energy Solutions and Urban Solutions segments.

Overall, the company’s segment profit came in at $191 million, reflecting an increase from $108 million a year ago. The segment margin of 4.8% expanded from 3.3% in the year-ago period. Adjusted EBITDA for the reported period was $181 million, up from $68 million in the prior-year period.

Fluor's total new awards for the quarter came in at $3.71 billion compared with $3.55 billion in the year-ago period. The consolidated backlog at the second-quarter end was $25.48 billion, down from $26.05 billion at 2022-end.

Segmental Discussion

The Energy Solutions segment’s revenues grew 29.4% year over year to $1,721 million in the second quarter, wherein our model expected the segmental revenues to grow 20.4% to $1,601.3 million year over year. The segment margin expanded 30 basis points (bps) to 5.2% from a year ago. New awards came in at $753 million in the quarter, down from $1,339 million in the second quarter of 2022. The backlog at the quarter-end was $7.65 billion compared with $9.13 billion at 2022-end.

Revenues in the Urban Solutions segment totaled $1,202 million, up 6% on a year-over-year basis. This segment’s reported figure was down from our prediction of $1,209.7 million. The segment margin was up 520 bps from a year ago to 6.3%. New awards came in at $2,282 million for the quarter, significantly up from $1,996 million a year ago. The backlog at the quarter-end was $11.7 billion, up from $10.3 billion at 2022-end.

Revenues in the Mission Solutions segment totaled $705 million, up 28.9% on a year-over-year basis. Our model predicted the segment revenues to grow 9.1% to 596.7 million. The segment margin improved 60 bps to 5.7% from the previous year. It booked new awards worth $339 million, up from $52 million a year ago. The backlog at the quarter-end was $4.9 billion compared with $5.67 billion at 2022-end.

The Other segment, which comprises NuScale, generated revenues of $311 million for the second quarter, up 8% from the year-ago period. Our model predicted segment revenues of $248 million for the quarter. The segment generated a loss of $14 million against $3 million profit a year ago. It booked new awards worth $336 million, up from the year-ago level of $163 million. The backlog at the quarter-end was $1.24 billion compared with $0.98 billion at 2022-end.

Guidance

For 2023, Fluor now expects adjusted EPS in the range of $2.00-$2.30, up from $1.50-$1.90 of prior projection. It now expects adjusted EBITDA in the range of $500-$600 million versus earlier expectations of $450-$600 million. The consensus mark for adjusted EPS is currently pegged at $1.74.

For 2026, it still anticipates adjusted EPS of $3.10-$3.60 and adjusted EBITDA in the range of $800-950 million.

Zacks Rank & Recent Construction Releases

Fluor 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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Vulcan experienced solid growth in both its top and bottom lines compared to the previous year. This performance can be attributed to the consistent strategic execution and the strong performance of its aggregates-led business. Additionally, the company benefited from large industrial projects and steady residential construction activity, which further contributed to its better-than-expected results.

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