On November 8, 2024, Fluor Corp (FLR, Financial) released its 8-K filing detailing its financial performance for the third quarter of 2024. The company, a leading global provider of engineering, procurement, construction, and maintenance services, reported a revenue of $4.1 billion, falling short of the analyst estimate of $4.738 billion. The diluted earnings per share (EPS) stood at $0.31, significantly below the estimated $0.75, although the adjusted EPS was $0.51.
Company Overview and Segment Performance
Fluor Corp (FLR, Financial) operates through three main segments: Urban Solutions, Mission Solutions, and Energy Solutions, serving diverse markets such as oil and gas, chemicals, and transportation. In 2023, the company generated $15.5 billion in revenue.
The Energy Solutions segment reported a profit of $50 million, a sharp decline from $177 million in the same quarter last year, primarily due to project delays and cost growth in a joint venture in Mexico. Urban Solutions, however, saw a slight increase in profit to $68 million, with revenue rising to $1.9 billion from $1.4 billion a year ago. Mission Solutions also improved its profit to $45 million, driven by increased execution activities on Department of Energy contracts.
Financial Achievements and Challenges
Fluor Corp (FLR, Financial) achieved a strong operating cash flow of $330 million for the quarter, prompting an increase in its 2024 cash flow guidance to approximately $700 million. The company also announced a significant gain of $1.6 billion expected in Q4 from the deconsolidation of NuScale.
Despite these achievements, the company faced challenges with lower-than-expected contributions from its Energy Solutions segment and a decrease in new awards, which totaled $2.7 billion compared to $5.0 billion in the previous year. The backlog, however, increased to $31.3 billion from $26 billion a year ago, indicating potential future growth.
Key Financial Metrics and Analysis
Fluor Corp (FLR, Financial) reported a net earnings attributable to the company of $54 million, down from $206 million in the third quarter of 2023. The company's general and administrative expenses decreased to $37 million from $56 million, reflecting lower performance-based compensation.
| Segment | Q3 2024 Revenue ($ million) | Q3 2023 Revenue ($ million) | Q3 2024 Profit ($ million) | Q3 2023 Profit ($ million) |
|---|---|---|---|---|
| Energy Solutions | 1,428 | 1,553 | 50 | 177 |
| Urban Solutions | 1,931 | 1,431 | 68 | 66 |
| Mission Solutions | 635 | 655 | 45 | 38 |
Fluor's cash and marketable securities at the end of the quarter were $2.9 billion, excluding amounts held by NuScale. The company's focus on cash generation and capital allocation is evident in its increased share repurchase program, now authorizing 30.5 million shares for repurchase.
“I’m pleased that we are starting to see a robust and sustainable generation of cash that will drive our capital allocation plans,” said David E. Constable, chairman and chief executive officer of Fluor.
Conclusion
Fluor Corp (FLR, Financial) faces a challenging environment with project delays impacting its financial performance. However, the company's strong cash flow and increased backlog provide a foundation for potential recovery and growth. The focus on capital allocation and strategic project execution will be crucial for Fluor as it navigates these challenges and seeks to capitalize on future opportunities in its diverse markets.
Explore the complete 8-K earnings release (here) from Fluor Corp for further details.
