Fluor Reports First Quarter 2023 Results
-
Q1 2023 revenue of
$3.8 billion 20% compared to prior year -
New awards of
$3.2 billion 81% reimbursable -
Q1 2023 net loss attributable to Fluor of
$107 million - Company affirms its 2023 and 2026 adjusted EPS and adjusted EBITDA guidance
1 Non-GAAP Financial Measure. See “Non-GAAP Financial Measures” for additional information.
“The underlying performance of our healthy backlog continues to be impacted by a few remaining legacy projects,” said David Constable, chairman and chief executive officer of Fluor. “We believe that the recent deployment of additional, experienced resources to these projects and our associated claim positions will put us on the straightest path to completion and accelerate our efforts to deliver consistent and repeatable operational results.”
First quarter new awards were consistent with company expectations at
Outlook
Based on the volume of higher margin awards received over the past 12 months, the strength of our prospect pipeline, and the strong execution platform deployed across our portfolio, Fluor affirms its 2023 and 2026 guidance. We are not providing forward-looking guidance for
|
2023 |
2026 |
Adjusted EBITDA1 Guidance |
|
|
Adjusted EPS1 Guidance |
|
|
Adjusted EPS and adjusted EBITDA guidance exclude items similar to those outlined in the reconciliation table at the end of this release. Guidance for 2023 anticipates a book-to-burn of approximately 1.0 with substantial new awards from all segments. Guidance also assumes a tax rate of approximately 40 percent on adjusted earnings, but the company notes that this rate may vary depending on the country in which profit is generated.
Business Segments
Energy Solutions reported a profit of
Urban Solutions reported a loss of
Mission Solutions reported a profit of
The Other segment, which includes Stork, AMECO and Fluor’s
Conference Call
Fluor will host a conference call at 8:30 a.m. Eastern on Friday, May 5, which will be webcast live and can be accessed by logging onto investor.fluor.com. The call will also be accessible by telephone at 888-800-3960 (
A replay of the webcast will be available for 30 days.
Non-GAAP Financial Measures
This news release contains discussions of consolidated segment profit (loss), adjusted net earnings, adjusted EPS and adjusted EBITDA that are non-GAAP financial measures under SEC rules. Segment profit (loss) is calculated as revenue less cost of revenue and earnings attributable to noncontrolling interests. The company believes that segment profit (loss) provides a meaningful perspective on its business results as it is the aggregation of individual segment profit measures that the company utilizes to evaluate and manage its business performance. Adjusted net earnings is defined as net earnings from core operations excluding NuScale profit (loss) and the impacts of foreign exchange fluctuations, impairments and certain items that management believes are unrelated to actual normalized operational performance. Net earnings from core operations is net earnings attributable to Fluor excluding the results of our remaining Stork and AMECO equipment businesses that are no longer classified as discontinued operations but that continue to be marketed for sale. Adjusted EPS is defined as adjusted net earnings divided by adjusted weighted average diluted shares outstanding. Adjusted weighted average diluted shares outstanding assumes the conversion of our convertible preferred stock. Adjusted EBITDA is defined as net earnings from operations before interest, income taxes, depreciation and amortization (EBITDA), further adjusted by the same items excluded from adjusted net earnings. The company believes adjusted net earnings, adjusted EPS and adjusted EBITDA allow investors to evaluate the company’s ongoing earnings on a normalized basis and make meaningful period-over-period comparisons. However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation from or a substitute for measures of financial performance prepared in accordance with
About Fluor Corporation
Fluor Corporation (NYSE: FLR) is building a better world by applying world-class expertise to solve its clients’ greatest challenges. Fluor’s 40,000 employees provide professional and technical solutions that deliver safe, well-executed, capital-efficient projects to clients around the world. Fluor had revenue of
Forward-Looking Statements: This release may contain forward-looking statements (including without limitation statements to the effect that the Company or its management "will," "believes," "expects," “anticipates,” "plans" or other similar expressions). These forward-looking statements, including statements relating to strategic and operation plans, future growth, new awards, backlog, earnings and the outlook for the company’s business.
Actual results may differ materially as a result of a number of factors, including, among other things, the cyclical nature of many of the markets the Company serves; the Company's failure to receive new contract awards; cost overruns, project delays or other problems arising from project execution activities, including the failure to meet cost and schedule estimates; intense competition in the industries in which we operate; failure of our joint venture or other partners to perform their obligations; the failure of our suppliers, subcontractors and other third parties to adequately perform services under our contracts; cyber-security breaches; possible information technology interruptions; foreign economic and political uncertainties; client cancellations of, or scope adjustments to, existing contracts; the inability to hire and retain qualified personnel; failure to maintain safe worksites and international security risks; risks or uncertainties associated with events outside of our control, including weather conditions, pandemics, public health crises, political crises or other catastrophic events; the use of estimates and assumptions in preparing our financial statements; client delays or defaults in making payments; uncertainties, restrictions and regulations impacting our government contracts; the potential impact of certain tax matters; the Company's ability to secure appropriate insurance; liabilities associated with the performance of nuclear services; foreign currency risks; the loss of one or a few clients that account for a significant portion of the Company's revenues; failure to adequately protect intellectual property rights; asset impairments; climate change and related environmental issues; increasing scrutiny with respect to sustainability practices; risks related to our indebtedness; the availability of credit and restrictions imposed by credit facilities, both for the Company and our clients, suppliers, subcontractors or other partners; possible limitations on bonding or letter of credit capacity; failure to obtain favorable results in existing or future litigation and regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs; failure by us or our employees, agents or partners to comply with laws; new or changing legal requirements, including those relating to environmental, health and safety matters; failure to successfully implement our strategic and operational initiatives; risks arising from the inability to successfully integrate acquired businesses; risks related to provisions of our convertible preferred stock; and restrictions on possible transactions imposed by our charter documents and
Additional information concerning these and other factors can be found in the Company's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Item 1A. Risk Factors" in the Company's Form 10-K filed on February 21, 2023. Such filings are available either publicly or upon request from Fluor's Investor Relations Department: (469) 398-7222. The Company disclaims any intent or obligation other than as required by law to update its forward-looking statements in light of new information or future events.
SUMMARY OF FINANCIALS AND |
||||||||||||
| THREE MONTHS ENDED MARCH 31, | ||||||||||||
| (in millions) |
|
2023 |
|
|
2022 |
|
||||||
| Revenue | ||||||||||||
| Energy Solutions | $ |
1,612 |
|
$ |
1,174 |
|
||||||
| Urban Solutions |
|
1,208 |
|
|
1,061 |
|
||||||
| Mission Solutions |
|
649 |
|
|
593 |
|
||||||
| Other |
|
283 |
|
|
294 |
|
||||||
| Total revenue | $ |
3,752 |
|
$ |
3,122 |
|
||||||
| Segment profit (loss) $ and margin % | ||||||||||||
| Energy Solutions |
|
88 |
|
5.5 |
% |
|
54 |
|
4.6 |
% |
||
| Urban Solutions |
|
(20 |
) |
-1.7 |
% |
|
17 |
|
1.6 |
% |
||
| Mission Solutions |
|
7 |
|
1.1 |
% |
|
58 |
|
9.8 |
% |
||
| Other |
|
(90 |
) |
NM |
|
|
(14 |
) |
NM |
|
||
| Total segment profit (loss) $ and margin % |
|
(15 |
) |
-0.4 |
% |
|
115 |
|
3.7 |
% |
||
| G&A |
|
(62 |
) |
|
(71 |
) |
||||||
| Impairment |
|
- |
|
|
63 |
|
||||||
| Foreign currency gain (loss) |
|
(41 |
) |
|
(19 |
) |
||||||
| Interest income (expense), net |
|
41 |
|
|
(9 |
) |
||||||
| Earnings (loss) attributable to NCI |
|
(23 |
) |
|
8 |
|
||||||
| Earnings (loss) before taxes |
|
(100 |
) |
|
87 |
|
||||||
| Income tax (expense) benefit |
|
(30 |
) |
|
(31 |
) |
||||||
| Net earnings (loss) |
|
(130 |
) |
|
56 |
|
||||||
| Less: Net earnings (loss) attributable to NCI |
|
(23 |
) |
|
8 |
|
||||||
| Net earnings (loss) attributable to Fluor |
|
(107 |
) |
|
48 |
|
||||||
| Less: Dividends on CPS |
|
10 |
|
|
10 |
|
||||||
| Net earnings (loss) available to Fluor common stockholders | $ |
(117 |
) |
$ |
38 |
|
||||||
| New awards | ||||||||||||
| Energy Solutions | $ |
712 |
|
$ |
682 |
|
||||||
| Urban Solutions |
|
1,775 |
|
|
598 |
|
||||||
| Mission Solutions |
|
331 |
|
|
386 |
|
||||||
| Other |
|
416 |
|
|
260 |
|
||||||
| Total new awards | $ |
3,234 |
|
$ |
1,926 |
|
||||||
| New awards related to projects located outside of the |
|
53 |
% |
|
36 |
% |
||||||
| (in millions) | MARCH 31, 2023 |
|||||||||||
| Backlog | ||||||||||||
| Energy Solutions | $ |
8,558 |
|
|||||||||
| Urban Solutions |
|
10,656 |
|
|||||||||
| Mission Solutions |
|
5,238 |
|
|||||||||
| Other |
|
1,171 |
|
|||||||||
| Total backlog | $ |
25,623 |
|
|||||||||
| Backlog related to projects located outside of the |
|
49 |
% |
|||||||||
| Backlog related to reimbursable projects |
|
64 |
% |
|||||||||
| (1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. | ||||||||||||
| RECONCILIATION OF |
|||||||
| THREE MONTHS ENDED MARCH 31, | |||||||
| (In millions, except per share amounts) |
|
2023 |
|
|
2022 |
|
|
| Net earnings (loss) attributable to Fluor | $ |
(107 |
) |
$ |
48 |
|
|
| Less: Dividends on CPS |
|
(10 |
) |
|
(10 |
) |
|
| Net earnings (loss) available to Fluor common stockholders |
|
(117 |
) |
|
38 |
|
|
| Less: Earnings from Stork and AMECO |
|
64 |
|
|
(7 |
) |
|
| Less: Tax expense on Stork and AMECO |
|
- |
|
|
- |
|
|
| Net earnings (loss) from core operations* |
|
(53 |
) |
|
31 |
|
|
| Add (less): | |||||||
| Dividends on CPS | $ |
10 |
|
$ |
10 |
|
|
| NuScale (profit) loss |
|
26 |
|
|
21 |
|
|
| ICA Fluor embedded derivatives |
|
39 |
|
|
13 |
|
|
| Tax expense (benefit) on ICA Fluor embedded derivatives |
|
(11 |
) |
|
(4 |
) |
|
| Impairment (2) |
|
- |
|
|
(63 |
) |
|
| Foreign currency (gain) loss |
|
41 |
|
|
19 |
|
|
| Tax expense (benefit) on foreign currency |
|
(9 |
) |
|
(5 |
) |
|
| SEC investigation |
|
5 |
|
|
5 |
|
|
| Adjusted Net Earnings | $ |
48 |
|
$ |
27 |
|
|
| Diluted EPS available to Fluor common stockholders | $ |
(0.82 |
) |
$ |
0.27 |
|
|
| Adjusted EPS | $ |
0.28 |
|
$ |
0.16 |
|
|
| Weighted average diluted shares outstanding |
|
142 |
|
|
144 |
|
|
| Assumed conversion of CPS |
|
27 |
|
|
27 |
|
|
| Assumed issuance of shares under equity awards |
|
5 |
|
|
3 |
|
|
| Adjusted weighted average diluted shares outstanding |
|
174 |
|
|
174 |
|
|
| *Core operations excludes the results of our Stork business and remaining AMECO equipment business that no longer meet all of the requirements to be classified discontinued operations but that continue to be marketed for sale. | |||||||
| (1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. | |||||||
| (2) Fair value adjustments of Stork and AMECO assets | |||||||
| RECONCILIATION OF |
||||||
| THREE MONTHS ENDED MARCH 31, | ||||||
| (in millions) |
|
2023 |
|
|
2022 |
|
| Net earnings (loss) attributable to Fluor | $ |
(107 |
) |
$ |
48 |
|
| Interest |
|
(41 |
) |
|
9 |
|
| Taxes |
|
30 |
|
|
31 |
|
| Depreciation & Amortization |
|
18 |
|
|
15 |
|
| EBITDA | $ |
(100 |
) |
$ |
103 |
|
| Adjustments: | ||||||
| Other: NuScale, Stork and AMECO expenses |
|
86 |
|
|
13 |
|
| Energy Solutions: Embedded foreign currency derivative (gains)/losses |
|
39 |
|
|
13 |
|
| G&A: Foreign currency loss |
|
41 |
|
|
19 |
|
| G&A: SEC Investigation |
|
5 |
|
|
5 |
|
| G&A: Impairment |
|
- |
|
|
(63 |
) |
| Adjusted EBITDA | $ |
71 |
|
$ |
90 |
|
| (1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. | ||||||
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Brett Turner
Media Relations
864.281.6976 tel
Jason Landkamer
Investor Relations
469.398.7222 tel
Source: Fluor Corporation
