Stork, part of Fluor Corporation’s (FLR - Free Report) Diversified Services segment, announced the divesture of Europe’s professional equipment rental business — EQIN — to a Netherlands-based private equity firm, VE Partners. However, the agreement is pending final approval by the Dutch Authority for Consumers and Markets.
The transaction is in line with the company’s strategy of divesting construction rental businesses.
Stork president Taco de Haan said, "The intended sale is a positive step for both Stork and EQIN. It will allow both companies to focus on their core businesses while continuing to collaborate and work together to serve our mutual clients, and at the same time, providing Stork with greater operational efficiency going forward.”
Fluor’s Strategic Initiatives to Boost Diversified Services Business
Fluor’s Diversified Services segment, which accounts for more than 13% of total revenues, has been posting dismal results over the last few quarters. The company initiated certain restructuring activities in first-quarter 2019 to optimize costs and improve operational efficiency in the Stork business.
Meanwhile, Fluor is unable to file its Form 10-Q on time, and is reviewing prior period reporting and related control environment, as well as completing its Form 10-K for 2019.
In February 2020, the company announced preliminary fourth-quarter and 2019 numbers for a few metrics. According to the results, new awards were $12.6 billion, of which $3.7 billion was recorded in the Energy & Chemicals unit, $1.9 billion in the Mining & Industrial segment, $2.6 billion in the Infrastructure & Power business, $2.2 billion in the Government unit, and $2.2 billion in the Diversified Services segment.
Shares of Fluor have gained 73.5% in the past three months, outperforming the industry's 13.7% growth. We believe new contract wins and the above-mentioned initiatives will help revive the company’s performance. Over the last few quarters, major contract wins have allowed Fluor to expand long-term recurring revenue opportunities.
Fluor — which shares space with KBR, Inc. (KBR - Free Report) , Jacobs Engineering Group Inc. (J - Free Report) and AECOM (ACM - Free Report) in the same industry — currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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