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Fluor (FLR) Q2 Earnings & Revenues Up on Solid Energy Solutions
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Fluor Corporation (FLR - Free Report) recently posted solid earnings for second-quarter 2023, which were more than double the Zacks Consensus Estimate and above five times the year-ago figure. Revenues also topped the consensus mark by 9.1% and increased by 19.4% from the year-ago level.
The top-line was backed by a ramp-up of execution activities on several recently awarded projects in the Energy Solutions, Urban Solutions and Mission Solutions segments, partially offset by declines in the volume of execution activity for projects that were completed or nearing completion.
Fluor Corporation Price, Consensus and EPS Surprise
Segment margin expanded 150 basis points (bps), mainly supported by higher execution activity on new projects and positive forecast adjustments on two Energy Solutions' projects and one legacy infrastructure project.
Solid Energy Solutions Business Results Drove Margins
During the reported period, Energy Solutions’ revenues grew 29.4% year over year to $1,721 million. The segment margin also expanded 30 bps to 5.2% from a year ago. The Zacks model suggested that the segmental revenues would grow 20.4% year over year. Solid execution activities on the refinery projects in Mexico, positive forecast adjustments on two projects and close-out matters on a chemicals project, as well as favorable foreign currency remeasurement, drove margins.
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. A lack of significant contracts related to chemicals and refinery projects in the second quarter of 2023 lowered new awards and the backlog.
Nonetheless, the strong underlying performance of the company’s non-legacy portfolio and large Energy Solutions projects helped it lift expectations for 2023.
For 2023, Fluor now expects adjusted EPS in the range of $2.00-$2.30, up from its prior projection of $1.50-$1.90. It now expects adjusted EBITDA in the range of $500-$600 million versus earlier expectations of $450-$600 million.
Impressive Performance of Other Three Segments
Urban Solutions: Revenues in the segment were up 6% on a year-over-year basis. The segment margin was up 520 bps from the year-ago period. New awards were up year over year on an infrastructure project in Texas and two life sciences projects. The backlog at the quarter’s end was $11.7 billion, up from $10.3 billion at 2022-end.
Mission Solutions: Revenues in the segment grew 28.9% on a year-over-year basis. The segment’s margin improved by 60 bps from the previous year. New awards were significantly up from a year ago, thanks to an increase in its ownership of an existing joint venture. The backlog at the quarter-end was $4.9 billion compared with $5.67 billion at 2022-end.
Other: The segment, which comprises NuScale and Stork, generated revenue growth of 8% from the year-ago period. Its new awards increased by more than double. The backlog at the quarter-end was $1.24 billion compared with $0.98 billion at 2022-end.
The company has decided to retain Stork's North American operations, which largely consist of its operations and maintenance business and has renamed it as Plant & Facility Services. This was included in the Urban Solutions segment for all the respective periods.
Quanta Services Inc. (PWR - Free Report) reported mixed results for second-quarter 2023, wherein adjusted earnings missed the Zacks Consensus Estimate but revenues surpassed the same. Both metrics were up on a year-over-year basis.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
KBR, Inc. (KBR - Free Report) reported mixed second-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus estimate for the seventh straight quarter. Revenues, on the other hand, surpassed the mark in three of the trailing seven quarters and missed on other four occasions.
Although KBR’s quarterly earnings were impacted by losses related to convertible notes and a legacy legal matter, the company delivered a strong quarter of financial and environmental, social and governance or ESG performance, underpinned by its mission focus and operational discipline.
Jacobs Engineering Group Inc. (J - Free Report) reported mixed results for third-quarter fiscal 2023 (ended Jun 30, 2023), with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.
Earnings declined year over year, but revenues increased on the back of solid performance across the portfolio. It also reported a near-record backlog thanks to a robust opportunity set, led by People and Places Solutions’ operating profit growth of 13% year-over-year.
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Fluor (FLR) Q2 Earnings & Revenues Up on Solid Energy Solutions
Fluor Corporation (FLR - Free Report) recently posted solid earnings for second-quarter 2023, which were more than double the Zacks Consensus Estimate and above five times the year-ago figure. Revenues also topped the consensus mark by 9.1% and increased by 19.4% from the year-ago level.
Shares of the company jumped 13.8% since Aug 4, when it released second quarter earnings, compared with the Zacks Engineering - R and D Services industry's 1% growth.
The top-line was backed by a ramp-up of execution activities on several recently awarded projects in the Energy Solutions, Urban Solutions and Mission Solutions segments, partially offset by declines in the volume of execution activity for projects that were completed or nearing completion.
Fluor Corporation Price, Consensus and EPS Surprise
Fluor Corporation price-consensus-eps-surprise-chart | Fluor Corporation Quote
Segment margin expanded 150 basis points (bps), mainly supported by higher execution activity on new projects and positive forecast adjustments on two Energy Solutions' projects and one legacy infrastructure project.
Solid Energy Solutions Business Results Drove Margins
During the reported period, Energy Solutions’ revenues grew 29.4% year over year to $1,721 million. The segment margin also expanded 30 bps to 5.2% from a year ago. The Zacks model suggested that the segmental revenues would grow 20.4% year over year. Solid execution activities on the refinery projects in Mexico, positive forecast adjustments on two projects and close-out matters on a chemicals project, as well as favorable foreign currency remeasurement, drove margins.
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. A lack of significant contracts related to chemicals and refinery projects in the second quarter of 2023 lowered new awards and the backlog.
Nonetheless, the strong underlying performance of the company’s non-legacy portfolio and large Energy Solutions projects helped it lift expectations for 2023.
For 2023, Fluor now expects adjusted EPS in the range of $2.00-$2.30, up from its prior projection of $1.50-$1.90. It now expects adjusted EBITDA in the range of $500-$600 million versus earlier expectations of $450-$600 million.
Impressive Performance of Other Three Segments
Urban Solutions: Revenues in the segment were up 6% on a year-over-year basis. The segment margin was up 520 bps from the year-ago period. New awards were up year over year on an infrastructure project in Texas and two life sciences projects. The backlog at the quarter’s end was $11.7 billion, up from $10.3 billion at 2022-end.
Mission Solutions: Revenues in the segment grew 28.9% on a year-over-year basis. The segment’s margin improved by 60 bps from the previous year. New awards were significantly up from a year ago, thanks to an increase in its ownership of an existing joint venture. The backlog at the quarter-end was $4.9 billion compared with $5.67 billion at 2022-end.
Other: The segment, which comprises NuScale and Stork, generated revenue growth of 8% from the year-ago period. Its new awards increased by more than double. The backlog at the quarter-end was $1.24 billion compared with $0.98 billion at 2022-end.
The company has decided to retain Stork's North American operations, which largely consist of its operations and maintenance business and has renamed it as Plant & Facility Services. This was included in the Urban Solutions segment for all the respective periods.
Zacks Rank
FLR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Recent Construction Releases
Quanta Services Inc. (PWR - Free Report) reported mixed results for second-quarter 2023, wherein adjusted earnings missed the Zacks Consensus Estimate but revenues surpassed the same. Both metrics were up on a year-over-year basis.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
KBR, Inc. (KBR - Free Report) reported mixed second-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus estimate for the seventh straight quarter. Revenues, on the other hand, surpassed the mark in three of the trailing seven quarters and missed on other four occasions.
Although KBR’s quarterly earnings were impacted by losses related to convertible notes and a legacy legal matter, the company delivered a strong quarter of financial and environmental, social and governance or ESG performance, underpinned by its mission focus and operational discipline.
Jacobs Engineering Group Inc. (J - Free Report) reported mixed results for third-quarter fiscal 2023 (ended Jun 30, 2023), with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.
Earnings declined year over year, but revenues increased on the back of solid performance across the portfolio. It also reported a near-record backlog thanks to a robust opportunity set, led by People and Places Solutions’ operating profit growth of 13% year-over-year.