Fluor Corporation (FLR) reported second quarter earnings of 93 cents per share, which is slightly above the Zacks Consensus Estimate of 92 cents and prior-year EPS of 87 cents.
The company witnessed improved margins in most of its businesses. Segment margin in the quarter was 5.8%, up 40 basis points from 5.4% in the second quarter of 2008.
Quarterly sales declined 8.3% to $5,292.6 million from $5,773.6 million last year due to major declines in the Global Services and Power segments. The Global Services segment reported a 35% decline in revenue due to a sharp decline in small capital projects. The company said the revenue in the Power segment declined 36% year over year as a large coal-fired project in Texas progressed closer to completion.
As for the other segments, Oil & Gas segment posted a 9% decline in revenue, while revenue in the Industrial & Infrastructure segment and the Government segment were up 9% and 60% respectively. Strong growth in the Government segment revenue was primarily driven by the contributions from LOGCAP IV task orders and FEMA task orders.
Fluor’s backlog at the end of the quarter stood at $30.9 billion, down 6% year over year, but up 6% sequentially. New project awards for the quarter amounted to $6.8 billion, compared to $6.4 billion last year. This included a large mining project in the Industrial & Infrastructure segment. The company expects additional mining opportunities during the year.
Further, at the start of the third quarter, Fluor’s Government segment won LOGCAP IV for northern Afghanistan. The total contract value is potentially more than $7 billion over five years.
Given its year-to-date performance and strong backlog, the company maintained its 2009 earnings guidance in the range of $3.80 to $4.10 per share. The Zacks Consensus estimate for the year is $3.88 per share.
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