IRVING, Texas–(BUSINESS WIRE)–Fluor
Corporation (NYSE: FLR) today announced financial results for its
first quarter ended March 31, 2019. The first quarter was a net loss
attributable to Fluor of $58 million, or $0.42 per diluted share,
compared to a net loss of $18 million, or $0.13 per diluted share a year
ago. Earnings attributable to Fluor were negatively impacted by $39
million, or $0.28 per diluted share, as a result of restructuring
charges, foreign exchange losses and related tax impacts. Excluding
these items, adjusted earnings attributable to Fluor for the first
quarter was a net loss of $19 million, or a loss of $0.14 per diluted
share. Consolidated segment profit for the quarter was $47 million
compared to $52 million a year ago. First quarter revenue was $4.2
billion compared to $4.8 billion last year.
New awards for the quarter were $3.4 billion, including $1.3 billion in
Mining, Industrial, Infrastructure & Power, $1 billion in Energy &
Chemicals, $810 million in Diversified Services and $331 million in
Government. Consolidated ending backlog of $39.3 billion compares to
$29.1 billion a year ago.
Corporate G&A expense for the first quarter of 2019 was $61 million,
compared with $57 million a year ago. Expenses for the quarter include
$19 million related to foreign exchange losses compared to $12 million a
year ago. Fluor’s cash and marketable securities balance at the end of
the first quarter was $1.9 billion, compared to $2.0 billion last
quarter. During the quarter, the company utilized $17 million in cash
from operating activities, and paid out $30 million in dividends.
Outlook
As a result of a revision of our business forecast in Energy & Chemicals
and Mining, Industrial, Infrastructure and Power, the company is issuing
adjusted earnings per share guidance of $1.50 to $2.00 per diluted
share. Adjusted EPS guidance excludes costs related to restructuring and
foreign exchange fluctuations.
Business Segments
Fluor’s Energy & Chemicals segment reported segment profit of
$19 million, compared to $106 million in the first quarter of 2018.
Results for the quarter include pre-tax charges of $53 million for
forecast revisions on an offshore project and $31 million for the
resolution of close-out matters with a customer, partially offset by
favorable project forecast revisions. First quarter 2019 revenue was
$1.5 billion compared to $1.9 billion a year ago. New awards in the
first quarter were $1 billion including a construction contract for a
chemical complex on the U.S. Gulf Coast. Ending backlog was $17.4
billion compared to $14.1 billion a year ago.
The Mining, Industrial, Infrastructure & Power segment reported a
segment profit of $0.4 million, compared to a segment loss of $120
million in the first quarter of 2018. Results for the quarter include a
pre-tax charge of approximately $26 million related to legacy gas-fired
power projects. Revenue for the segment was $1.4 billion compared to
$907 million a year ago primarily due to increased project execution
activities in mining & metals. New awards in the first quarter were $1.3
billion including the Red/Purple line modernization project for the
Chicago Transit Authority. Ending backlog for the segment was $15.1
billion compared to $10.3 billion a year ago.
The Government segment reported segment profit of $17 million, compared
to $48 million a year ago. Revenue for the segment declined to $785
million from $1.3 billion a year ago. Results for the first quarter
reflect the completion of the power restoration project in Puerto Rico a
year ago and the inclusion of expenses related to NuScale. New awards
totaled $331 million for the quarter, and ending backlog was $4.2
billion, up from $2.4 billion a year ago.
The Diversified Services segment reported a segment profit of $10
million in the first quarter of 2019, compared to $19 million a year
ago. Revenue for the quarter was $550 million compared to $643 million
in the first quarter of 2018. New awards totaled $810 million for the
quarter, and ending backlog was $2.6 billion, up from $2.3 billion a
year ago.
First Quarter Conference Call – Revised Time
Fluor will now host a conference call today at 8:30 a.m. Eastern time,
which will be webcast live on the Internet and can be accessed by
logging onto http://investor.fluor.com.
The call will also be accessible by telephone at 888-254-3590
(U.S./Canada) or 323-994-2093. The conference ID is 9132841. A
supplemental slide presentation will be available shortly before the
call begins.
A replay of the webcast will be available for 30 days. A replay of the
call will be available by telephone for one week by dialing 888-203-1112
(U.S./Canada) or 719-457-0820, conference ID 9132841.
Non-GAAP Financial Measure
This press release contains discussions of consolidated segment profit,
adjusted earnings and adjusted earnings per diluted share that would be
deemed non-GAAP financial measures under SEC rules. Segment profit is
calculated as revenue less cost of revenue and earnings attributable to
noncontrolling interests excluding: corporate general and administrative
expense; interest expense; interest income; domestic and foreign income
taxes; and other non-operating income and expense items. The company
believes that consolidated segment profit 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 earnings and adjusted
earnings per diluted share exclude restructuring charges, foreign
exchange impacts and related tax impacts. The company believes that
adjusted earnings and adjusted earnings per diluted share allow
investors to evaluate the company’s ongoing earnings potential on a
normalized basis and make meaningful period-over-period comparisons.
Reconciliations of consolidated segment profit to earnings (loss) before
taxes, adjusted earnings to GAAP net earnings, and adjusted earnings per
diluted share to GAAP earnings per diluted share are included in the
press release tables. This press release also includes forward-looking
references to adjusted earnings per diluted share guidance.
Reconciliation of the adjusted earnings per diluted share guidance to
GAAP earnings per diluted share is not available without unreasonable
efforts because the company cannot predict with sufficient certainty all
of the components required to provide such reconciliation.
About Fluor Corporation
Founded in 1912, Fluor
Corporation (NYSE: FLR) is a global engineering, procurement,
fabrication, construction and maintenance company that transforms the
world by building prosperity and empowering progress. With its
integrated solutions approach, Fluor serves its clients by designing,
building and maintaining safe, well executed, capital-efficient projects
around the world. With headquarters in Irving, Texas, Fluor ranks 153 on
the Fortune 500 list with revenue of $19.2 billion in 2018 and
has more than 53,000 employees worldwide. For more information, please
visit www.fluor.com
or follow Fluor on Facebook,
Twitter,
LinkedIn
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
“believes,” “expects,” is “positioned” or other similar expressions).
These forward-looking statements, including statements relating to
future growth, backlog, earnings and the outlook for the Company’s
business are based on current management expectations and involve risks
and uncertainties. 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, including the Company’s Energy &
Chemicals segment; 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 to obtain favorable results in existing or future litigation,
dispute resolution proceedings or claims, including claims for
additional costs; failure of our joint venture or other partners,
suppliers or subcontractors to perform their obligations; cyber-security
breaches; 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; client delays or defaults in making payments; the
Company’s failure, or the failure of our agents or partners, to comply
with laws; the use of estimates and assumptions in preparing our
financial statements; the potential impact of certain tax matters;
possible information technology interruptions or inability to protect
intellectual property; new or changing legal requirements, including
those relating to environmental, health and safety matters; the
availability of credit and restrictions imposed by credit facilities,
both for the Company and our clients, suppliers, subcontractors or other
partners; the Company’s ability to secure appropriate insurance;
liabilities associated with the performance of nuclear services; foreign
currency risks; the inability to hire and retain qualified personnel;
the loss of one or a few clients that account for a significant portion
of the Company’s revenues; possible limitations on bonding or letter of
credit capacity; risks or uncertainties associated with acquisitions,
dispositions and investments; asset impairments; and risks arising from
the inability to successfully integrate acquired businesses. 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.
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, 2019.
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.
| FLUOR CORPORATION | ||||||||||
| CONSOLIDATED FINANCIAL RESULTS | ||||||||||
| (in millions, except per share amounts) | ||||||||||
| Unaudited | ||||||||||
| CONSOLIDATED OPERATING RESULTS | ||||||||||
| THREE MONTHS ENDED MARCH 31 | 2019 | 2018 | ||||||||
| Revenue | $ | 4,192.7 | $ | 4,823.8 | ||||||
| Cost and expenses: | ||||||||||
| Cost of revenue | 4,131.0 | 4,766.0 | ||||||||
| Corporate general and administrative expense | 61.0 | 57.3 | ||||||||
| Restructuring and other exit costs | 27.4 | — | ||||||||
| Interest expense, net | 5.7 | 9.6 | ||||||||
| Total cost and expenses | 4,225.1 | 4,832.9 | ||||||||
| Earnings (loss) before taxes | (32.4 | ) | (9.1 | ) | ||||||
| Income tax expense | 10.9 | 3.0 | ||||||||
| Net earnings (loss) | (43.3 | ) | (12.1 | ) | ||||||
| Less: Net earnings attributable to noncontrolling interests | 15.1 | 5.5 | ||||||||
| Net earnings (loss) attributable to Fluor Corporation | $ | (58.4 | ) | $ | (17.6 | ) | ||||
| Basic earnings (loss) per share | ||||||||||
| Net earnings (loss) | $ | (0.42 | ) | $ | (0.13 | ) | ||||
| Weighted average shares | 139.8 | 140.1 | ||||||||
| Diluted earnings (loss) per share | ||||||||||
| Net earnings (loss) | $ | (0.42 | ) | $ | (0.13 | ) | ||||
| Weighted average shares | 139.8 | 140.1 | ||||||||
| New awards | $ | 3,400.2 | $ | 2,536.1 | ||||||
| Backlog | $ | 39,333.3 | $ | 29,132.2 | ||||||
| Work performed | $ | 4,081.7 | $ | 4,710.0 | ||||||
|
U.S. GAAP RECONCILIATION OF ADJUSTED EARNINGS (LOSS) AND ADJUSTED EARNINGS (LOSS) PER DILUTED SHARE |
|||||
| (in millions, except per share amounts) | |||||
| THREE MONTHS ENDED MARCH 31 | 2019 | ||||
| GAAP net earnings (loss) attributable to Fluor Corporation | $ | (58.4 | ) | ||
| Restructuring and other exit costs | 27.4 | ||||
| Foreign exchange impact | 26.6 | ||||
| Tax effect of above items | (14.9 | ) | |||
| Adjusted earnings (loss) | $ | (19.3 | ) | ||
| GAAP earnings (loss) per diluted share | $ | (0.42 | ) | ||
| Effect of adjustments to net earnings (loss) | 0.28 | ||||
| Adjusted earnings (loss) per diluted share | $ | (0.14 | ) | ||
| Weighted average shares | 139.8 | ||||
| FLUOR CORPORATION | ||||||||||||||||
| Unaudited | ||||||||||||||||
|
BUSINESS SEGMENT FINANCIAL REVIEW AND U.S. GAAP RECONCILIATION OF CONSOLIDATED SEGMENT PROFIT |
||||||||||||||||
| ($ in millions) | ||||||||||||||||
| THREE MONTHS ENDED MARCH 31 | 2019 | 2018 | ||||||||||||||
| Revenue | ||||||||||||||||
| Energy & Chemicals | $ | 1,476.6 | $ | 1,943.0 | ||||||||||||
| Mining, Industrial, Infrastructure & Power | 1,381.2 | 907.0 | ||||||||||||||
| Government | 784.7 | 1,330.5 | ||||||||||||||
| Diversified Services | 550.2 | 643.3 | ||||||||||||||
| Total revenue | $ | 4,192.7 | $ | 4,823.8 | ||||||||||||
| Segment profit (loss) $ and margin % (2) | ||||||||||||||||
| Energy & Chemicals | $ | 19.4 | 1.3 | % | $ | 105.7 | 5.4 | % | ||||||||
| Mining, Industrial, Infrastructure & Power | 0.4 | — | % | (120.4 | ) | (13.3 | )% | |||||||||
| Government(1) | 16.6 | 2.1 | % | 48.2 | 3.6 | % | ||||||||||
| Diversified Services | 10.2 | 1.9 | % | 18.8 | 2.9 | % | ||||||||||
| Total segment profit $ and margin % | $ | 46.6 | 1.1 | % | $ | 52.3 | 1.1 | % | ||||||||
| Corporate general and administrative expense | (61.0 | ) | (57.3 | ) | ||||||||||||
| Restructuring and other exit costs | (27.4 | ) | — | |||||||||||||
| Interest expense, net | (5.7 | ) | (9.6 | ) | ||||||||||||
| Earnings attributable to noncontrolling interests | 15.1 | 5.5 | ||||||||||||||
| Earnings (loss) before taxes | $ | (32.4 | ) | $ | (9.1 | ) | ||||||||||
| (1) |
Includes research and development expenses associated with NuScale totaling $16 million and $23 million for the three months ended March 31, 2019 and 2018, respectively. |
|
| (2) |
Segment profit margin % is calculated as segment profit divided by segment revenue. |
|
| FLUOR CORPORATION | ||||||||||
| Unaudited | ||||||||||
| SELECTED BALANCE SHEET ITEMS | ||||||||||
| ($ in millions) | ||||||||||
| March 31, 2019 | December 31, 2018 | |||||||||
| Cash and marketable securities | $ | 1,904.5 | $ | 1,979.6 | ||||||
| Total current assets | 5,242.6 | 5,440.9 | ||||||||
| Total assets | 9,041.7 | 8,913.6 | ||||||||
| Total short-term debt | 35.9 | 26.9 | ||||||||
| Total current liabilities | 3,527.9 | 3,552.5 | ||||||||
| Long-term debt | 1,650.9 | 1,661.6 | ||||||||
| Shareholders’ equity | 2,952.3 | 2,963.2 | ||||||||
| SELECTED CASH FLOW ITEMS | ||||||||||
| ($ in millions) | ||||||||||
| THREE MONTHS ENDED MARCH 31 | 2019 | 2018 | ||||||||
| Cash utilized by operating activities | $ | (17.5 | ) | $ | (136.0 | ) | ||||
| Investing activities | ||||||||||
| Net sales and maturities (purchases) of marketable securities | 116.1 | 130.9 | ||||||||
| Capital expenditures | (48.2 | ) | (65.1 | ) | ||||||
| Proceeds from disposal of property, plant and equipment | 10.7 | 16.5 | ||||||||
| Investments in partnerships and joint ventures | (12.0 | ) | (15.5 | ) | ||||||
| Other items | 1.1 | 0.1 | ||||||||
| Cash provided by investing activities | 67.7 | 66.9 | ||||||||
| Financing activities | ||||||||||
| Dividends paid | (30.0 | ) | (30.2 | ) | ||||||
|
Distributions paid to noncontrolling interests, net of capital contributions |
(5.4 | ) | (22.9 | ) | ||||||
| Other items | 5.6 | (4.9 | ) | |||||||
| Cash utilized by financing activities | (29.8 | ) | (58.0 | ) | ||||||
| Effect of exchange rate changes on cash | 20.6 | 9.0 | ||||||||
| Increase (decrease) in cash and cash equivalents | $ | 41.0 | $ | (118.1 | ) | |||||
| Depreciation | $ | 45.3 | $ | 51.9 | ||||||
| FLUOR CORPORATION | ||||||||||||||||
| Supplemental Fact Sheet | ||||||||||||||||
| Unaudited | ||||||||||||||||
| NEW AWARDS | ||||||||||||||||
| ($ in millions) | ||||||||||||||||
| THREE MONTHS ENDED MARCH 31 | 2019 | 2018 | ||||||||||||||
| Energy & Chemicals | $ | 1,003 | 29 | % | $ | 721 | 28 | % | ||||||||
| Mining, Industrial, Infrastructure & Power | 1,256 | 37 | % | 1,339 | 53 | % | ||||||||||
| Government | 331 | 10 | % | 43 | 2 | % | ||||||||||
| Diversified Services | 810 | 24 | % | 433 | 17 | % | ||||||||||
| Total new awards | $ | 3,400 | 100 | % | $ | 2,536 | 100 | % | ||||||||
| BACKLOG TRENDS | ||||||||||||||||
| ($ in millions) | ||||||||||||||||
| AS OF MARCH 31 | 2019 | 2018 | ||||||||||||||
| Energy & Chemicals | $ | 17,441 | 44 | % | $ | 14,127 | 49 | % | ||||||||
| Mining, Industrial, Infrastructure & Power | 15,092 | 38 | % | 10,273 | 35 | % | ||||||||||
| Government | 4,231 | 11 | % | 2,399 | 8 | % | ||||||||||
| Diversified Services | 2,569 | 7 | % | 2,333 | 8 | % | ||||||||||
| Total backlog | $ | 39,333 | 100 | % | $ | 29,132 | 100 | % | ||||||||
| United States | $ | 12,455 | 32 | % | $ | 11,673 | 40 | % | ||||||||
| The Americas (excluding the United States) | 15,776 | 40 | % | 3,779 | 13 | % | ||||||||||
| Europe, Africa and the Middle East | 8,757 | 22 | % | 12,232 | 42 | % | ||||||||||
| Asia Pacific (including Australia) | 2,345 | 6 | % | 1,448 | 5 | % | ||||||||||
| Total backlog | $ | 39,333 | 100 | % | $ | 29,132 | 100 | % | ||||||||
Contacts
Brian Mershon
Media Relations
469.398.7621 tel
Jason Landkamer
469.398.7222 tel
Investor Relations
