Fluor Reports First Quarter 2024 Results
Fluor (NYSE: FLR) reported impressive first quarter 2024 results with new awards totaling $7.0 billion and a 28% increase in ending backlog to $32.7 billion. The company plans to divest non-core businesses by the end of Q2 and affirms its 2024 adjusted EPS and adjusted EBITDA guidance. Revenue for the quarter was $3.7 billion, with a net income of $59 million or $0.34 per diluted share. Adjusted EBITDA was $88 million and adjusted earnings per diluted share were $0.47.
Substantial new awards from clients in the Urban Solutions segment driving backlog growth to a level not seen since 2019.
Ending backlog increased by 28% to $32.7 billion, with new awards of $7.0 billion in the first quarter.
Consolidated segment profit improved to $118 million compared to a $15 million loss in the first quarter of 2023.
Cost growth of $29 million for a construction only subcontract in Mexico impacting financial results for the quarter.
Insights
-
New awards of
$7.0 billion 97% reimbursable -
Ending backlog increased
28% to$32.7 billion 80% reimbursable - Expect divestiture of non-core businesses by end of Q2
- Company affirms its 2024 adjusted EPS and adjusted EBITDA guidance
“2024 is off to a good start with substantial new awards from clients in our Urban Solutions segment,” said David Constable, chairman and chief executive officer of Fluor. “This demand, which we believe is just beginning, drove our backlog to a level not achieved since 2019.”
First quarter new awards were
1 Non-GAAP Financial Measure. See “Non-GAAP Financial Measures” for additional information.
Outlook
We are not providing forward-looking guidance for
The company affirms its 2024 adjusted EBITDA guidance of
Business Segments
Energy Solutions reported a profit of
Urban Solutions reported a profit of
Mission Solutions reported a profit of
The Other segment, which includes the remaining Stork and AMECO businesses and Fluor’s
Conference Call
Fluor will host a conference call at 8:30 a.m. Eastern on Friday, May 3, 2024 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 businesses that are no longer classified as discontinued operations but that continue to be marketed for sale or that have been sold. 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 30,000 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; the inability to hire and retain qualified personnel; 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; 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 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; climate change, natural disasters 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; and restrictions on possible transactions imposed by our charter documents and
SUMMARY OF FINANCIALS AND |
||||||||||||
|
|
THREE MONTHS ENDED MARCH 31, |
||||||||||
(in millions) |
|
2024 |
|
2023 |
||||||||
Revenue |
|
|
|
|
|
|
||||||
Energy Solutions |
|
$ |
1,432 |
|
|
|
$ |
1,612 |
|
|
||
Urban Solutions |
|
|
1,479 |
|
|
|
|
1,208 |
|
|
||
Mission Solutions |
|
|
601 |
|
|
|
|
649 |
|
|
||
Other |
|
|
222 |
|
|
|
|
283 |
|
|
||
Total revenue |
|
$ |
3,734 |
|
|
|
$ |
3,752 |
|
|
||
|
|
|
|
|
|
|
||||||
Segment profit (loss) $ and margin % |
|
|
|
|
|
|
||||||
Energy Solutions |
|
$ |
68 |
|
4.7 |
% |
|
$ |
88 |
|
5.5 |
% |
Urban Solutions |
|
|
50 |
|
3.4 |
% |
|
|
(20 |
) |
(1.7) |
% |
Mission Solutions |
|
|
22 |
|
3.7 |
% |
|
|
7 |
|
1.1 |
% |
Other |
|
|
(22 |
) |
NM |
|
|
|
(90 |
) |
NM |
|
Total segment profit (loss) $ and margin % |
|
$ |
118 |
|
3.2 |
% |
|
$ |
(15 |
) |
(0.4) |
% |
|
|
|
|
|
|
|
||||||
G&A |
|
|
(59 |
) |
|
|
|
(62 |
) |
|
||
Foreign currency gain (loss) |
|
|
12 |
|
|
|
|
(41 |
) |
|
||
Interest income (expense), net |
|
|
39 |
|
|
|
|
41 |
|
|
||
Earnings (loss) attributable to NCI |
|
|
(19 |
) |
|
|
|
(23 |
) |
|
||
Earnings (loss) before taxes |
|
|
91 |
|
|
|
|
(100 |
) |
|
||
Income tax expense |
|
|
(51 |
) |
|
|
|
(30 |
) |
|
||
Net earnings (loss) |
|
|
40 |
|
|
|
|
(130 |
) |
|
||
Less: Net earnings (loss) attributable to NCI |
|
|
(19 |
) |
|
|
|
(23 |
) |
|
||
Net earnings (loss) attributable to Fluor |
|
$ |
59 |
|
|
|
$ |
(107 |
) |
|
||
|
|
|
|
|
|
|
||||||
New awards |
|
|
|
|
|
|
||||||
Energy Solutions |
|
$ |
716 |
|
|
|
$ |
712 |
|
|
||
Urban Solutions |
|
|
4,873 |
|
|
|
|
1,775 |
|
|
||
Mission Solutions |
|
|
1,145 |
|
|
|
|
331 |
|
|
||
Other |
|
|
284 |
|
|
|
|
416 |
|
|
||
Total new awards |
|
$ |
7,018 |
|
|
|
$ |
3,234 |
|
|
||
|
|
|
|
|
|
|
||||||
New awards related to projects located outside of the |
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
(in millions) |
|
March 31,
|
|
|
March 31,
|
|
||||||
Backlog |
|
|
|
|
|
|
||||||
Energy Solutions |
|
$ |
9,259 |
|
|
|
$ |
8,558 |
|
|
||
Urban Solutions |
|
|
18,603 |
|
|
|
|
10,656 |
|
|
||
Mission Solutions |
|
|
4,389 |
|
|
|
|
5,238 |
|
|
||
Other |
|
|
488 |
|
|
|
|
1,171 |
|
|
||
Total backlog |
|
$ |
32,739 |
|
|
|
$ |
25,623 |
|
|
||
|
|
|
|
|
|
|
||||||
Backlog related to projects located outside of the |
|
|
|
|
|
|
||||||
Backlog related to reimbursable projects |
|
|
|
|
|
|
||||||
(1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. |
||||||||||||
SUMMARY OF CASH FLOW INFORMATION |
||||||||
|
|
Three Months Ended March 31, |
||||||
(in millions) |
|
2024 |
|
2023 |
||||
OPERATING CASH FLOW |
|
$ |
(111 |
) |
|
$ |
(161 |
) |
|
|
|
|
|
||||
INVESTING CASH FLOW |
|
|
|
|
||||
Proceeds from sales and maturities (purchases) of marketable securities |
|
|
(5 |
) |
|
|
11 |
|
Capital expenditures |
|
|
(34 |
) |
|
|
(20 |
) |
Proceeds from sale of assets (including AMECO-South America in 2023) |
|
|
30 |
|
|
|
22 |
|
Investments in partnerships and joint ventures |
|
|
(13 |
) |
|
|
(2 |
) |
Other |
|
|
— |
|
|
|
2 |
|
Investing cash flow |
|
|
(22 |
) |
|
|
13 |
|
|
|
|
|
|
||||
FINANCING CASH FLOW |
|
|
|
|
||||
Purchases and retirement of debt |
|
|
(10 |
) |
|
|
(137 |
) |
Dividends paid on CPS |
|
|
— |
|
|
|
(10 |
) |
Other |
|
|
(16 |
) |
|
|
(14 |
) |
Financing cash flow |
|
|
(26 |
) |
|
|
(161 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
|
(25 |
) |
|
|
7 |
|
Increase (decrease) in cash and cash equivalents |
|
|
(184 |
) |
|
|
(302 |
) |
Cash and cash equivalents at beginning of period |
|
|
2,519 |
|
|
|
2,439 |
|
Cash and cash equivalents at end of period |
|
$ |
2,335 |
|
|
$ |
2,137 |
|
|
|
|
|
|
||||
Cash paid during the period for: |
|
|
|
|
||||
Interest |
|
$ |
20 |
|
|
$ |
19 |
|
Income taxes (net of refunds) |
|
|
46 |
|
|
|
24 |
|
RECONCILIATION OF |
|||||||
|
THREE MONTHS ENDED MARCH 31, |
||||||
(In millions, except per share amounts) |
2024 |
|
2023 |
||||
Net earnings (loss) attributable to Fluor |
$ |
59 |
|
|
$ |
(107 |
) |
Less: Dividends on CPS |
|
— |
|
|
|
10 |
|
Net earnings (loss) available to Fluor common stockholders |
$ |
59 |
|
|
$ |
(117 |
) |
Exclude: Stork and AMECO businesses marketed for sale |
|
8 |
|
|
|
64 |
|
Exclude: Tax expense on Stork and AMECO |
|
— |
|
|
|
— |
|
Net earnings (loss) from core operations* |
|
67 |
|
|
|
(53 |
) |
Add (less): |
|
|
|
||||
Dividends on CPS |
$ |
— |
|
|
$ |
10 |
|
NuScale (profit) loss |
|
31 |
|
|
|
26 |
|
ICA Fluor embedded derivatives |
|
(7 |
) |
|
|
39 |
|
Tax expense (benefit) on ICA Fluor embedded derivatives |
|
2 |
|
|
|
(11 |
) |
Foreign currency (gain) loss |
|
(12 |
) |
|
|
41 |
|
Tax expense (benefit) on Canadian foreign currency gain/loss |
|
2 |
|
|
|
1 |
|
Tax expense (benefit) on Mexican foreign currency gain/loss |
|
(2 |
) |
|
|
(10 |
) |
SEC investigation |
|
— |
|
|
|
5 |
|
Adjusted Net Earnings |
$ |
81 |
|
|
$ |
48 |
|
|
|
|
|
||||
Diluted EPS available to Fluor common stockholders |
$ |
0.34 |
|
|
$ |
(0.82 |
) |
Adjusted EPS |
$ |
0.47 |
|
|
$ |
0.28 |
|
|
|
|
|
||||
Weighted average diluted shares outstanding |
|
173 |
|
|
|
142 |
|
Assumed conversion of CPS |
|
— |
|
|
|
27 |
|
Assumed issuance of shares under equity awards |
|
2 |
|
|
|
5 |
|
Adjusted weighted average diluted shares outstanding |
|
175 |
|
|
|
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. |
|||||||
RECONCILIATION OF |
|||||||
|
THREE MONTHS ENDED MARCH 31, |
||||||
(in millions) |
2024 |
2023 |
|||||
|
|
|
|||||
Net earnings (loss) attributable to Fluor |
$ |
59 |
|
$ |
(107 |
) |
|
Interest income |
|
(39 |
) |
|
(41 |
) |
|
Tax expenses |
|
51 |
|
|
30 |
|
|
Depreciation & amortization |
|
18 |
|
|
18 |
|
|
EBITDA |
$ |
89 |
|
$ |
(100 |
) |
|
|
|
|
|||||
Adjustments: |
|
|
|||||
Other: NuScale, Stork and AMECO expenses |
$ |
18 |
|
$ |
86 |
|
|
Energy Solutions: Embedded foreign currency derivative (gains)/losses |
|
(7 |
) |
|
39 |
|
|
G&A: Foreign currency (gain) loss |
|
(12 |
) |
|
41 |
|
|
G&A: SEC investigation |
|
— |
|
|
5 |
|
|
Adjusted EBITDA |
$ |
88 |
|
$ |
71 |
|
|
(1) Certain amounts in tables may not total or agree back to the financial statements due to immaterial rounding differences. |
|||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240503530868/en/
Brett Turner
Media Relations
864.281.6976 tel
Jason Landkamer
Investor Relations
469.398.7222 tel
Source: Fluor Corporation
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