A Tale of Two Backlogs: Jacobs Engineering's Backlog Down, While Fluor Sets New Quarterly Record

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Researched by Industrial Info Resources (Sugar Land, Texas)--Engineering and construction services firms Fluor Corporation (NYSE:FLR) (Irving, Texas) and Jacobs Engineering Group (NYSE:JEC) (Pasadena, California) recently reported quarterly results. Earnings for Fluor's second quarter (ended June 30) and Jacobs' third quarter (ended July 2) were both down from the same period of the previous year, although the companies' backlog activities for the quarter differed significantly.

At the end of the second quarter, Jacob's project backlog was down more than $2 billion from the same time in 2009. In a conference call regarding the earnings, Chief Financial Officer John W. Prosser Jr. said, "The numbers were disappointing, coming in at a total value of $13.5 billion. Professional services backlog was at $7.8 billion. Those are down from a year ago; they're also down from last quarter. There was really nothing unusual in the quarter, either in any big wins or in any significant cancellations. We've cautioned you folks in the past that backlog can be lumpy, and while it's been fairly consistent the last few quarters, we did have a slow booking period."

Conversely, Fluor received the highest quarterly award amount in the company's history, raising the company's project backlog 17.5% from the same time last year. Speaking in a conference, Fluor Chairman and CEO Alan Boeckmann said, "Second-quarter new awards were a record $9.3 billion, and it's important to note that this surpassed our previous corporate record of $8.8 billion, which was achieved in the third quarter of 2008. It's certainly well above the recent quarterly run-rate of approximately $3 billion." Fluor's consolidated backlog stood at $30.2 billion at the end of the quarter, up from $25.7 billion at the same time last year.

Fluor's Industrial & Infrastructure segment booked $7.2 billion of projects during the quarter, primarily led by Metals & Minerals Industry projects. Fluor received several large contracts for global mining and metals projects, all of which are being tracked by Industrial Info. Mining and metals projects and contract amounts booked during the quarter include:

• BHP Billiton's (NYSE:BHP) Rapid Growth Program iron ore project in the Pilbara region of Western Australia ($500 million)
• Saudi Arabian Mining Company (Ma'aden) and Alcoa's joint venture Ras Az'Zwar aluminum complex in Saudi Arabia ($3 billion)
• the Oy u Tolgoi copper-gold project in Mongolia (approximately $1 billion)
• the Caserones copper mine project in central Chile ($1.4 billion)

"I think our large mining awards this quarter are yet another reminder that [Fluor's] strategy of diversity continues to set us apart from all others in the engineering and construction peer group. Whether you look at our business from an industry or a geographic perspective, we are the leader in a number of important markets. We've obviously had broad success in Oil & Gas for many years, but now we've ramped up our Mining business to unprecedented levels," said Boeckmann.

Industrial Info is tracking industrial projects with a combined total investment value of more than $22 billion in which Jacobs Engineering is playing a role and more than $100 billion of projects involving Fluor. Information on these and other projects covering 12 industrial sectors throughout the world can be found in Industrial Info's North American and International project databases.

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Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.