Fluor Corporation (FLR) has been offered a design and construction management contract by International Business Machines (IBM) for capital projects at three new locations in the northeast United States. Fluor is currently working at eight other IBM sites in Arizona, California, Colorado, Minnesota, North Carolina and Texas. Fluor will include the contract in the fourth quarter of 2010.
The three new facilities are located in New York.
Fluor stands out as one of the few engineering and construction companies having the technological expertise, logistics, procurement capabilities and project management experience that is needed for a large variety of projects, including large complex projects for a diverse group of industrial and government clients virtually anywhere in the world. Given its strong financial position, Fluor will have ample resources to pursue a niche acquisition program aimed at strengthening its considerable service breadth. The company is delivering solid results with the help of its diversified business model and targeted new awards strategy.
Flour is one of the best-in-class E&C companies with a favorable contract mix, diverse service offerings, and strong relationships around the world; allowing it to sustain operating margin going forward relative to its peers without diminishing the growth potential. These firms believe project wins in the next few quarters will be fraught with intense competition, raising concern for potential margins on any new awards.
The current worldwide financial crisis will likely affect a portion of its client base, as well as subcontractors and suppliers, and could materially affect its backlog and profits. Backlog is subject to unexpected adjustments and cancellations and, therefore, may not be a reliable indicator of future earnings.
The Industrial & Infrastructure segment provides design, engineering, procurement and construction services for new construction and refurbishment, to the transportation, wind power, mining and metals, life sciences, telecommunications, manufacturing, commercial and institutional development, microelectronics and healthcare sectors. These projects often require state-of-the-art application of its clients’ processes and intellectual knowledge.
Acting through its subsidiaries, Fluor Corporation is one of the largest professional services firms, providing engineering, procurement, construction and maintenance as well as project management services on a global basis. It serves a diverse set of industries worldwide including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government. Jacob’s Engineering Group (JEC) is a major competitor.
We currently have a ‘Neutral’ recommendation on Fluor Corporation.
FLUOR CORP-NEW (FLR): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
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