Fluor's First-Quarter Net Earnings Up 50% From Last Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--Engineering, procurement and construction giant Fluor Corporation (NYSE:FLR) (Irving, Texas) recently announced financial results for the first quarter of the 2009 fiscal year. Net earnings attributable to Fluor were up 50%, rising from $136.7 million in 1Q08 to $204.8 million in 1Q09. More than $5.49 billion of new projects were awarded to Fluor during the quarter.

The company ended the quarter with a backlog of $29.13 billion, down 7% from the same period of the previous year. The al-Zour refinery project in Kuwait was cancelled during the quarter, resulting in a $2.1 billion loss from the company's backlog. In a conference call regarding the earnings, Chairman and CEO Alan Boeckmann discussed the company's disappointment in the project cancellation. "This was clearly not something that we were expecting at the time of our last call," he said. "In fact, we had just received assurances from our client that the project was proceeding. We did not expect it would lead to this project being cancelled, so we were certainly surprised and I would say definitely disappointed by this development."

Of Fluor's five business segments, three showed increased revenue from 1Q08, boosting total segment revenue by 21% to $5.80 billion. Individual segments performed as follows:

• Oil & Gas - revenue of $3.37 billion, up 29% from 1Q08
• Industrial & Infrastructure - revenue of $1.18 billion, up 48% from the previous year
• Government - revenue of $370.8 million, up 33% from 1Q08
• Global Services - revenue of $542.1 million, down 23%
• Power - revenue of $338.9 million, down 20% from 1Q08

Boeckmann discussed some of the reasons behind Fluor's increasing presence in the renewable energy sector, stating, "New coal projects continue to be elusive ... with considerable environmental hurdles and challenges. Clearly, the lack of carbon legislation and the aversion to anything that creates carbon emissions is going to continue to be an impediment to new investment in this area." Boeckmann pointed to the company's successful entry into the U.K. wind power market as an example. "The offshore wind area continues to take shape in the U.K., where we recently formed its Seagreen Wind Energy Limited with Airtricity, the renewable energy division of Scottish and Southern Energy. Seagreen has bid for the exclusive rights to develop windfarms under the Crown Estate's Round 3 Offshore Windfarm Development Program." For additional information, see news article from April 24, 2009 - Airtricity and Fluor in Joint Venture to Bid for U.K.'s Round 3 Offshore Wind Development Program.

Airtricity and Fluor were previously successful under the Round 2 bidding process when they came together to bid for the 500-megawatt (MW) Greater Gabbard windfarm project off of the Suffolk coast in the U.K. Industrial Info has been covering this estimated $540 million project since the Site Study stage in 2004. Construction of the project is scheduled to kick off in July of this year and is scheduled to be completed in the early part of 2011. Information on this project and more than $74 billion of other Fluor projects in 19 countries can be found in Industrial Info's International Industrial Database.

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