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Fluor JV Clinches Contract from U.S. Department of Energy
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Fluor Corporation (FLR - Free Report) recently announced that Four Rivers Nuclear Partnership (“FRNP”), LLC, a joint venture comprised of CH2M, Fluor Corporation and BWX Technologies, has clinched a contract from the U.S. Department of Energy (“DOE”). The premium engineering and construction firm is set to lead the Paducah Deactivation and Remediation (“D&R”) contract at the Paducah Gaseous Diffusion Plant in Kentucky.
This is a performance-based contract, valued at roughly $1.5 billion and spans over a period of 10 years. The base term is five years, valued at approximately $750 million. This is followed by three-year and two-year option periods, valued at a combined approximate of $750 million. The scope of the work includes management of more than 650 structures, properties and buildings. Per the contract, Fluor will help optimize surveillance and maintenance costs to improve stabilization, deactivation and remediation activities.
The company has been providing its services in the Paducah site for long and has made it safer by removing hazardous and radioactive materials. Also, Fluor has been a partner of DOE for more than seven decades now, aiding in key projects such as Idaho Site, Savannah River Site and Strategic Petroleum Reserve. The latest contract win adds another feather to the company’s cap.
Fluor has a solid track record of receiving awards. Management remains optimistic about continuation of this trend in the future as well, which is expected to drive growth for the company. Consolidated backlog at the end of 2016 was $41.7 billion. Fluor remains optimistic about its long-term prospects that include growth opportunities in renewable energy, gas-fired combined cycle generation and air emissions compliance projects.
Despite long-term growth drivers, Fluor’s profitability in the near term remains questionable. The stock has lost 15.7% in the last six months, wider than the average loss of 12.1% recorded by the Zacks Categorized Engineering Engineering R&D Service industry. Furthermore, Fluor’s earnings estimates have moved south in the past couple of months. The Zacks Consensus Estimate for 2017 earnings dropped to $2.44 from $2.86 over the past 60 days, which indicates bearish analyst sentiment for the stock.
Fluor began 2017 on a dismal note marked by a colossal earnings plunge and a downward guidance revision. This is mainly attributable to risks associated with the pace of new awards and a waning revenue trajectory. Volatility in commodity prices and currency fluctuations also adds to the company’s woes.
Slow burn on a couple of key projects and absence of new awards at a reasonable price are making matters worse. Currently, the company’s margins are under pressure as it is transitioning from higher-margin engineering to lower-margin construction activities, particularly related to Energy & Chemicals & Mining segment. Also, an increased level of irrational bidding in feed pricing, along with the customers’ tendency to settle for a lower contract price, have been adding to the Zacks Rank #3 (Hold) company’s woes.
TopBuild has a positive average earnings surprise of 6.0% for the last four quarters, having beaten estimates thrice.
Lennar has a stellar earnings surprise history with an average positive surprise of 8.7%, beating estimates all through.
EMCOR Group has a decent earnings beat history, having surpassed estimates thrice over the trailing four quarters. It has an average positive surprise of 15.4% over the same time frame.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Fluor JV Clinches Contract from U.S. Department of Energy
Fluor Corporation (FLR - Free Report) recently announced that Four Rivers Nuclear Partnership (“FRNP”), LLC, a joint venture comprised of CH2M, Fluor Corporation and BWX Technologies, has clinched a contract from the U.S. Department of Energy (“DOE”). The premium engineering and construction firm is set to lead the Paducah Deactivation and Remediation (“D&R”) contract at the Paducah Gaseous Diffusion Plant in Kentucky.
This is a performance-based contract, valued at roughly $1.5 billion and spans over a period of 10 years. The base term is five years, valued at approximately $750 million. This is followed by three-year and two-year option periods, valued at a combined approximate of $750 million. The scope of the work includes management of more than 650 structures, properties and buildings. Per the contract, Fluor will help optimize surveillance and maintenance costs to improve stabilization, deactivation and remediation activities.
The company has been providing its services in the Paducah site for long and has made it safer by removing hazardous and radioactive materials. Also, Fluor has been a partner of DOE for more than seven decades now, aiding in key projects such as Idaho Site, Savannah River Site and Strategic Petroleum Reserve. The latest contract win adds another feather to the company’s cap.
Fluor has a solid track record of receiving awards. Management remains optimistic about continuation of this trend in the future as well, which is expected to drive growth for the company. Consolidated backlog at the end of 2016 was $41.7 billion. Fluor remains optimistic about its long-term prospects that include growth opportunities in renewable energy, gas-fired combined cycle generation and air emissions compliance projects.
Despite long-term growth drivers, Fluor’s profitability in the near term remains questionable. The stock has lost 15.7% in the last six months, wider than the average loss of 12.1% recorded by the Zacks Categorized Engineering Engineering R&D Service industry. Furthermore, Fluor’s earnings estimates have moved south in the past couple of months. The Zacks Consensus Estimate for 2017 earnings dropped to $2.44 from $2.86 over the past 60 days, which indicates bearish analyst sentiment for the stock.
Fluor began 2017 on a dismal note marked by a colossal earnings plunge and a downward guidance revision. This is mainly attributable to risks associated with the pace of new awards and a waning revenue trajectory. Volatility in commodity prices and currency fluctuations also adds to the company’s woes.
Slow burn on a couple of key projects and absence of new awards at a reasonable price are making matters worse. Currently, the company’s margins are under pressure as it is transitioning from higher-margin engineering to lower-margin construction activities, particularly related to Energy & Chemicals & Mining segment. Also, an increased level of irrational bidding in feed pricing, along with the customers’ tendency to settle for a lower contract price, have been adding to the Zacks Rank #3 (Hold) company’s woes.
Stocks to Consider
Better-ranked stocks in the industry include TopBuild Corp. (BLD - Free Report) , Lennar Corporation (LEN - Free Report) and EMCOR Group, Inc. (EME - Free Report) . While TopBuild sports a Zacks Rank #1 (Strong Buy), Lennar and EMCOR carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TopBuild has a positive average earnings surprise of 6.0% for the last four quarters, having beaten estimates thrice.
Lennar has a stellar earnings surprise history with an average positive surprise of 8.7%, beating estimates all through.
EMCOR Group has a decent earnings beat history, having surpassed estimates thrice over the trailing four quarters. It has an average positive surprise of 15.4% over the same time frame.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>