Fluor reports 3Q16 results

New awards for the quarter were US$7 billion, including US$5.6 billion in energy, chemicals and mining and US$955 million in Government. Consolidated ending backlog of US$44.3 billion compares to US$41.7 billion a year ago.

"We are very disappointed in the construction progress on a fixed price Gulf Coast project that led to a significant charge this quarter," said David Seaton, Fluor Chairman and Chief Executive Officer. "Looking ahead to 2017, we remain focused on project execution and continuing to capture key prospects as they develop across our businesses.”

Corporate G&A expense for the 3Q16 was US$27 million, compared to US$35 million a year ago. Fluor’s cash and marketable securities balance at the end of the third quarter was US$2.1 billion.

As a result of the charge in energy, chemicals and mining, the company is revising its 2016 guidance for EPS to a range of US$2.20 - US$2.40 per diluted share, from the previous range of US$3.25 - US$3.50 per diluted share. For 2017, the company is establishing its initial EPS guidance at a range of US$2.75 to US$3.25 per diluted share. Guidance for 2017 assumes continued challenges in our commodity focused segment, offset by increasing opportunities in infrastructure, industrial and government.

Fluor’s energy, chemicals and mining segment reported a segment loss of US$60 million, compared to a segment profit of US$208 million a year ago. Results for the quarter reflect a US$241 million pre-tax charge on a petrochemical facility in the US. Revenue of US$2.3 billion declined from US$2.8 billion a year ago primarily due to lower mining activities. Third quarter new awards of US$5.6 billion include an award for the Tengiz Oil Expansion Project in Kazakhstan. Ending backlog was US$23.7 billion compared to US$30.1 billion a year ago, and reflects an adjustment for an LNG contract that has been suspended.

The industrial, infrastructure and power segment reported segment profit of US$28 million, compared to a loss of US$29 million in the 3Q15 that was primarily due to cost increases on a power project. Revenue for the segment increased 89% to US$1.1 billion from US$596 million a year ago. Results for the quarter reflect increased execution activities on nuclear and gas-fired power projects. Ending backlog for the segment was US$11.5 billion, up from US$5.1 billion a year ago.

The government segment reported segment profit of US$26 million, compared to US$30 million a year ago. Revenue for the quarter was US$681 million, compared to US$661 million a year ago. Third quarter new awards of US$955 million include additional funding on the Savannah River project. Ending backlog was US$5.9 billion, up from US$3.8 billion a year ago.

The maintenance, modification and asset integrity segment reported segment profit of US$29 million in the 3Q16, compared to US$32 million a year ago. Revenue for the quarter was US$632 million compared to US$326 million in the 3Q15. Results for the quarter reflect contributions from the Stork business, offset by declines in the equipment and power services business lines. New awards totalled US$350 million for the quarter, and ending backlog was US$3.3 billion, up from US$2.7 billion a year ago.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/04112016/fluor-reports-3q16-results/