Fluor announced financial results for its third quarter ended September 30, 2009. Revenue declined by 4 percent to $5.4 billion, compared with $5.7 billion in the third quarter of 2008, mainly driven by decreases in the Oil & Gas and Power segments. Net earnings attributable to Fluor in the third quarter of 2009 were $162 million, a decrease of 11 percent from $182 million a year ago. Earnings per diluted share was $0.89, compared with $1.00 per diluted share for the same period last year. Segment profit for the quarter was $300 million, down 8 percent from $324 million a year ago. While three of the five business segments reported earnings growth over 2008, the Oil & Gas segment profit declined by 8 percent and the Global Services segment profit was impacted by a $45 million provision relating to a collection issue on a completed paper mill revamp project. Segment margins were 5.5 percent this quarter compared with 5.7 percent in the third quarter of 2008.
Corporate G&A expense for the quarter was $50 million, up from $45 million in the third quarter of 2008. Fluor’s financial condition remains strong, with cash plus current and non-current marketable securities totaling $2.4 billion, up from $2.2 billion a year ago.
"Strong new awards in 2008 and the first half of 2009 have contributed to Fluor's $28 billion backlog, allowing us to maintain our selectivity and discipline when pursuing new prospects," said Chairman and Chief Executive Officer Alan Boeckmann. "Looking ahead to 2010, we are taking a cautious view of our markets at this time, but remain hopeful that a broader economic recovery will develop during the year."
Due to the collection issue on the paper mill project, along with the impact of recent cancellations, scope reductions and delays, the company has trimmed its 2009 earnings guidance to a range of $3.75 to $3.90 per share. For 2010, while the company is optimistic that the general economy and capital investment levels will recover, recent delays suggest that the outlook for many of our markets remains uncertain. As a result, we are establishing initial 2010 earnings guidance in the range of $3.20 to $3.60 per share.
Fluor's Oil & Gas segment reported third quarter revenue of $2.9 billion, down 11 percent from the third quarter of 2008, while segment profit declined 8 percent to $189 million. Declines in both revenue and segment profit reflect declining new award and backlog levels in recent quarters. New awards in the third quarter totaled $1.2 billion, which compares with a record $5.1 billion a year ago. Ending backlog for Oil & Gas at September 30, 2009 was $13.1 billion, down 43 percent from $22.8 billion a year ago. Backlog reflects the impact of project cancellations, scope reductions and delays of approximately $5 billion during 2009, including a $1.2 billion gas processing project in Russia which was removed from backlog this quarter.
Results for the Nine Months
Net earnings attributable to Fluor for the first nine months of 2009 were $536 million, up from $527 million for the first nine months of 2008. Earnings per diluted share for the nine months rose to $2.93, which compares with $2.86 per diluted share for the same period last year. Results for 2008 included a pre-tax gain of $79 million, or $0.27 per diluted share, from the sale of a joint venture interest in the Greater Gabbard offshore wind power project. Revenue for the first nine months of 2009 was up modestly to $16.5 billion, compared with $16.3 billion in the first nine months of last year.
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