- Q2 2024 revenue of $4.2 billion, an increase of 7% compared
to prior year
- Q2 2024 net earnings attributable to Fluor of $169 million
compared to $61 million in prior year period
- Q2 2024 diluted earnings per share (EPS) of $0.97; adjusted
diluted EPS of $0.85
- Strong Q2 operating cash flow of $282 million, 2024 cash
guidance range increased to $500 to $600 million
- Company affirms 2024 adjusted EPS and tightens adjusted
EBITDA guidance
Fluor Corporation (NYSE: FLR) announced financial results for
its second quarter ended June 30, 2024. Revenue for the quarter was
$4.2 billion and net earnings attributable to Fluor were $169
million, or $0.97 per diluted share. Consolidated segment profit1
for the quarter was $194 million compared to $191 million profit in
the second quarter of 2023. Excluding the adjustments outlined in
the reconciliation table at the end of this release, the company
recognized adjusted earnings per diluted share1 of $0.85.
[1] Non-GAAP Financial Measure. See “Non-GAAP Financial
Measures” for additional information.
“Our quarterly results demonstrate that our strategy is working,
thereby ensuring targeted market growth and project execution
excellence,” said David E. Constable, chairman and chief executive
officer of Fluor. “For the second half of 2024, our focus will be
on deploying resources onto our high-value project backlog and
positioning the company to return capital to shareholders.”
Second quarter new awards were $3.1 billion compared to $3.7
billion in the second quarter of 2023. Ending consolidated backlog
was $32.3 billion compared to $25.5 billion a year ago. General and
administrative expenses for the second quarter of 2024 were $50
million compared to Q2 2023 expenses of $60 million. Fluor’s cash
and marketable securities at the end of the quarter improved to
$2.6 billion, excluding amounts held by NuScale.
Outlook
We are not providing forward-looking guidance for U.S. GAAP net
earnings or U.S. GAAP earnings per share, or a quantitative
reconciliation of adjusted EBITDA or adjusted EPS guidance, because
we are unable to predict with reasonable certainty all of the
components required to provide such reconciliation without
unreasonable efforts, which are uncertain and could have a material
impact on GAAP reported results for the guidance period. See
“Non-GAAP Financial Measures” for additional information.
The company affirms its adjusted EPS guidance of $2.50 to $3.00
per share and tightens 2024 adjusted EBITDA guidance from $600 to
$700 million to $625 to $675 million. Guidance reflects strong
execution on the non-legacy portfolio, progress on entitlement
negotiations, and considerable opportunities in Urban and Energy
Solutions. Adjusted EPS and adjusted EBITDA guidance exclude items
similar to those outlined in the reconciliation table at the end of
this release.
Business Segments
Energy Solutions reported a profit of $75 million in the second
quarter compared to $89 million in the second quarter of 2023.
Results for the quarter reflect several large projects in the late
stages of execution. During the quarter, the company turned the
Penguins FPSO over to the client. Revenue for the quarter was $1.6
billion compared to $1.7 billion a year ago. New awards in the
quarter totaled $582 million, compared to $753 million in the
second quarter of 2023. Ending backlog improved 11% to $8.5 billion
from $7.7 billion a year ago.
Urban Solutions reported a profit of $105 million in the second
quarter compared to $76 million profit in the second quarter of
2023. Results include an increase in execution activities on
multiple advanced technology and life sciences projects, and an
agreement to the terms of a change order on a legacy infrastructure
project. Revenue for the second quarter increased 52% to $1.8
billion from $1.2 billion a year ago primarily due to the ramp up
of execution activities on several recently awarded projects. New
awards for the quarter were $2.4 billion, compared to $2.3 billion
a year ago and included an incremental award on a large metals
project. Ending backlog improved by 67% to $19.6 billion from $11.7
billion a year ago.
Mission Solutions reported a profit of $41 million in the second
quarter compared to $40 million in the second quarter of 2023.
Revenue of $704 million for the second quarter was flat compared to
a year ago. During the quarter Mission Solutions substantially
completed its remaining legacy project, F.E. Warren. New awards for
the quarter totaled $63 million, compared to $339 million in the
second quarter of 2023. In early July, a notice to proceed was
issued for the Pantex M&O contract where Fluor is a substantial
minority partner. The estimated value of the contract to the joint
venture is $30 billion based on all three of the five-year options
being exercised. Ending backlog was $3.8 billion compared to $4.9
billion a year ago. Backlog does not reflect ongoing contributions
from projects related to our equity method investments.
The Other segment, which includes Stork and Fluor’s 51%
ownership in NuScale, reported revenue of $97 million and a loss of
$27 million which was primarily related to NuScale.
Conference Call
Fluor will host a conference call at 8:30 a.m. Eastern on
Friday, August 2, 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 (U.S./Canada) or +1
646-307-1852. The conference ID is 4438700.
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 U.S. GAAP. In addition, these non-GAAP measures are
not necessarily comparable to similarly titled measures reported by
other companies. Reconciliations of consolidated segment profit
(loss), adjusted net earnings, adjusted EPS and adjusted EBITDA to
the most comparable GAAP measures are included in the press release
tables. The company is unable to provide a reconciliation of its
adjusted EPS and adjusted EBITDA guidance to the most comparable
GAAP measure without unreasonable efforts because it is unable to
predict with reasonable certainty all of the components required to
provide such reconciliation, including the impact of foreign
exchange fluctuations, which are uncertain and could have a
material impact on GAAP reported results for the guidance
period.
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 nearly 34,000 employees provide professional
and technical solutions that deliver safe, well-executed,
capital-efficient projects to clients around the world. Fluor had
revenue of $15.5 billion in 2023 and is ranked 265 among the
Fortune 500 companies. With headquarters in Irving, Texas, Fluor
has provided engineering, procurement and construction services for
more than 110 years. For more information, please visit Fluor.com
or follow Fluor on Facebook, LinkedIn, X and YouTube.
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 Delaware law. Caution must be
exercised in relying on these and other forward-looking statements.
Due to known and unknown risks, the Company’s results may differ
materially from its expectations and projections.
SUMMARY OF FINANCIALS AND U.S. GAAP
RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT (LOSS)(1)
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)
2024
2023
2024
2023
Revenue
Energy Solutions
$
1,595
$
1,721
$
3,028
$
3,333
Urban Solutions
1,831
1,202
3,309
2,411
Mission Solutions
704
705
1,305
1,354
Other
97
311
319
594
Total revenue
$
4,227
$
3,939
$
7,961
$
7,692
Segment profit (loss) $ and margin
%
Energy Solutions
$
75
4.7
%
$
89
5.2
%
$
143
4.7
%
$
178
5.3
%
Urban Solutions
105
5.7
%
76
6.3
%
155
4.7
%
55
2.3
%
Mission Solutions
41
5.8
%
40
5.7
%
63
4.8
%
47
3.5
%
Other
(27
)
NM
(14
)
NM
(49
)
NM
(104
)
NM
Total segment profit (loss) $ and
margin %
$
194
4.6
%
$
191
4.8
%
$
312
3.9
%
$
176
2.3
%
G&A
(50
)
(60
)
(110
)
(121
)
Foreign currency gain (loss)
48
(44
)
60
(86
)
Interest income (expense), net
38
37
77
78
Earnings (loss) attributable to NCI
(16
)
7
(34
)
(16
)
Earnings (loss) before taxes
214
131
305
31
Income tax expense
(61
)
(63
)
(111
)
(93
)
Net earnings (loss)
$
153
$
68
$
194
$
(62
)
Less: Net earnings (loss) attributable to
NCI
(16
)
7
(34
)
(16
)
Net earnings (loss) attributable to
Fluor
$
169
$
61
$
228
$
(46
)
New awards
Energy Solutions
$
582
$
753
$
1,298
$
1,465
Urban Solutions
2,416
2,282
7,289
4,057
Mission Solutions
63
339
1,208
670
Other
37
336
321
752
Total new awards
$
3,098
$
3,710
$
10,116
$
6,944
New awards related to projects located
outside of the U.S.
31
%
47
%
28
%
49
%
(in millions)
June 30, 2024
June 30, 2023
Backlog
Energy Solutions
$
8,531
$
7,649
Urban Solutions
19,571
11,695
Mission Solutions
3,775
4,900
Other
427
1,239
Total backlog
$
32,304
$
29,441
Backlog related to projects located
outside of the U.S.
53
%
47
%
Backlog related to reimbursable
projects
81
%
64
%
(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
Six Months Ended
June 30,
(in millions)
2024
2023
OPERATING CASH FLOW
$
171
$
(99
)
INVESTING CASH FLOW
Proceeds from sales and maturities
(purchases) of marketable securities
(9
)
127
Capital expenditures
(82
)
(42
)
Proceeds from sale of assets
74
23
Investments in partnerships and joint
ventures
(21
)
(10
)
Other
—
5
Investing cash flow
(38
)
103
FINANCING CASH FLOW
Purchase and retirement of debt
(24
)
(137
)
Dividends paid on CPS
—
(20
)
Distributions to NCI (net of capital
contributions)
(6
)
(25
)
Proceeds from NuScale share issuance (net
of issuance fees)
45
—
Other
(9
)
(15
)
Financing cash flow
6
(197
)
Effect of exchange rate changes on
cash
(29
)
16
Increase (decrease) in cash and cash
equivalents
110
(177
)
Cash and cash equivalents at beginning of
period
2,519
2,439
Cash and cash equivalents at end of
period
$
2,629
$
2,262
Cash paid during the period for:
Interest
$
22
$
31
Income taxes (net of refunds)
31
70
RECONCILIATION OF U.S. GAAP NET
EARNINGS (LOSS) TO ADJUSTED NET EARNINGS AND U.S. GAAP EARNINGS PER
SHARE TO ADJUSTED EARNINGS PER SHARE (1)
THREE MONTHS ENDED JUNE
30,
SIX MONTHS ENDED JUNE
30,
(In millions, except per share
amounts)
2024
2023
2024
2023
Net earnings (loss) attributable to
Fluor
$
169
$
61
$
228
$
(46
)
Less: Dividends on CPS
—
10
—
20
Net earnings (loss) available to Fluor
common stockholders
$
169
$
51
$
228
$
(66
)
Exclude: Stork and AMECO businesses
marketed for sale
—
(5
)
8
59
Exclude: Tax expense on Stork and
AMECO
—
—
—
—
Net earnings (loss) from core
operations
169
46
236
(7
)
Add (less):
Dividends on CPS
$
—
$
10
$
—
$
20
NuScale (profit) loss
26
20
57
46
ICA Fluor embedded derivatives
(20
)
8
(27
)
47
Tax expense (benefit) on ICA Fluor
embedded derivatives
6
(2
)
8
(13
)
Foreign currency (gain) loss
(48
)
44
(60
)
86
Tax expense (benefit) on foreign currency
gain/loss
15
(9
)
15
(18
)
G&A: Reserve for legacy legal
claims
—
3
—
3
G&A: NuScale marketing costs borne by
Fluor
—
5
—
5
SEC investigation
—
5
—
10
Adjusted Net Earnings
$
148
$
130
$
229
$
179
Diluted EPS available to Fluor common
stockholders
$
0.97
$
0.35
$
1.32
$
(0.46
)
Adjusted EPS
$
0.85
$
0.76
$
1.32
$
1.04
Weighted average diluted shares
outstanding
174
143
173
143
Assumed conversion of CPS
—
27
—
27
Assumed issuance of shares under equity
awards
2
2
2
2
Adjusted weighted average diluted
shares outstanding
176
172
175
172
(1) Certain amounts in tables may not
total or agree back to the financial statements due to immaterial
rounding differences.
RECONCILIATION OF U.S. GAAP
NET EARNINGS (LOSS) TO ADJUSTED EBITDA (1)
THREE MONTHS ENDED JUNE
30,
SIX MONTHS ENDED JUNE
30,
(in millions)
2024
2023
2024
2023
Net earnings (loss) attributable to
Fluor
$
169
$
61
$
228
$
(46
)
Interest income
38
37
77
78
Tax expenses
(61
)
(63
)
(111
)
(93
)
Depreciation & amortization
16
19
34
37
EBITDA
$
208
$
106
$
296
$
6
Adjustments:
Other: NuScale, Stork and AMECO
earnings
$
25
$
15
$
44
$
99
Energy Solutions: Embedded foreign
currency derivative (gains)/losses
(20
)
8
(27
)
47
G&A: Foreign currency (gain) loss
(48
)
44
(60
)
86
G&A: Reserve for legacy legal
claims
—
3
—
3
G&A: SEC investigation
—
5
—
10
Adjusted EBITDA
$
165
$
181
$
253
$
251
(1) Certain amounts in tables may not
total or agree back to the financial statements due to immaterial
rounding differences.
#corp
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240802939639/en/
Brett Turner Media Relations 864.281.6976 tel
Jason Landkamer Investor Relations 469.398.7222 tel
Fluor (NYSE:FLR)
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