Fluor Reports Jump in Revenues, Backlog in First-Quarter 2012 as New Projects Bear Fruit

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Researched by Industrial Info Resources (Sugar Land, Texas)--Leading engineering, procurement, construction and project management firm Fluor Corporation (NYSE:FLR) (Irving, Texas) reported strong overall growth for the first quarter of 2012, as three of its major segments saw solid gains in revenues and profits, and its consolidated backlog hit an all-time high. Net income for the quarter was reported to be $154.9 million, a 10.88% increase from first-quarter 2011.

Revenues for the quarter totaled $6.29 billion, a 24.36% increase from the same period last year. Among the most notable achievements for Fluor was the consolidated backlog of $42.5 billion, which is a record for the company. The Oil & Gas segment saw its highest number of new awards in a year, including two downstream projects for Reliance Industries Limited (BSE:500325) (Mumbai, India) in India and refinery projects for Petroleos Mexicanos (Mexico City, Mexico) in Mexico. The Industrial & Infrastructure segment reported strong growth in its mining and metals businesses, including the awarding of two copper projects in the U.S. and an iron-ore project in Western Australia. The Global Services segment benefited from growth in the operations, maintenance and equipment businesses.

Industrial Info is tracking more than $152 billion in active projects involving Fluor, including the $2.8 billion construction of a grassroot, commercial-scale nickel and hydromet processing plant in Long Harbour-Mount Arlington Heights, Newfoundland, and the $2.1 billion decontamination and decommissioning of a former gaseous diffusion plant in Piketon, Ohio. The Newfoundland project, on which Fluor is performing engineering and construction, is owned by Vale Inco Newfoundland & Labrador Limited and involves constructing a 50,000-ton-per-year nickel hydrometallurgical refinery, using hydromet technology to process nickel concentrate that is transported from the Voisey's Bay Mine. The Piketon project, on which Fluor is a contractor, involves demolishing and disposing of 133 buildings that cover more than 30 acres each and are owned by the U.S. Department of Energy. The projects are set to be completed in February 2013 and April 2016, respectively.

"When you look at our end markets overall, we really see opportunities across the portfolio, including oil and gas, petrochemicals, mining, transportation, power and government," said David Seaton, the chairman and chief executive officer of Fluor, in a conference call.

Of Fluor's five segments, only Power saw lower revenues or profits for the quarter:

• The Oil & Gas segment reported $2.04 billion in revenues for the quarter, a 23.23% increase from first-quarter 2011, and $73.4 million in profits, an 18.77% increase.
• The Industrial & Infrastructure segment reported $2.8 billion in revenues for the quarter, a 40.38% increase from the same period last year, and profits of $103.3 million, a 12.16% increase.
• The Government segment reported $850.1 million in revenues for the quarter, a 3.86% increase from first-quarter 2011, and $35.3 million in profits, a 3.52% increase.
• The Global Services segment reported $426.4 million in revenues for the quarter, a 12.66% increase from the same period last year, and $43.2 million in profits, a 39.35% increase.
• The Power segment reported $174.9 million in revenues for the quarter, a 17.34% decrease from first-quarter 2011, and $1.9 million in losses, compared with $29.5 million in profits in the same period last year.

Fluor executives are maintaining their expectations for continuing growth throughout 2012, based in part on the strong earnings so far and the flurry of new orders. Seaton said that international capital programs continue to dominate the outlook. Capital expenditures are expected to be between $250 million and $280 million.

"We continue to work on numerous front-end programs in Oil & Gas [segment], and we feel very good about this continuing level of feed activity, as it represents a tremendous aggregate total installed costs and sizable engineering, procurement and construction activities for Fluor," Seaton said in the conference call.

"The mining and metals business line is working on a number of feasibility and feed contracts, and commodity markets continue to support the substantial ongoing capital investments of our customers," he later added about the Industrial & Infrastructure segment. "2012 is shaping up to be another busy year."

For more information, visit Industrial Info's North American Industrial Manufacturing Project Database.

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