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Fluor Corporation has announced financial results for its second quarter ended June 30, 2009. Net earnings attributable to Fluor were $169 million, compared with $208 million for the same period last year. Segment profit for the quarter was $309 million, compared with $392 million in the second quarter of 2008 which included a pre-tax gain of $79 million, from the sale of the Company’s joint venture interest in the Greater Gabbard Offshore Wind Farm project. Segment margin improved to 5.8%, from 5.4% a year ago excluding the Greater Gabbard gain. Revenue declined 8% to $5.3 billion in the second quarter of 2009, down from $5.8 billion a year ago, driven by declines in the Oil & Gas, Global Services and Power segments.
New project awards for the second quarter were substantial at $6.8 billion, compared with $6.4 billion in new awards a year ago. Current quarter awards included a large mining project and a $1.3 billion oil sands project. Consolidated backlog rose to $30.9 billion, up from $29.1 billion last quarter, but down 6% from a year ago primarily due to cancellations and scope reductions of oil and gas projects during the first quarter. At the end of the second quarter, the company was notified that it had won the LOGCAP IV competition for northern Afghanistan, with a total contract value of potentially more than $7 billion over five years. New awards under this contract will be recognized as specific task orders are incrementally funded.
“Fluor’s focus on specific near-term prospects in its diversified end markets has once again allowed us to record substantial new bookings in a very challenging economic environment,” said chairman and chief executive officer Alan Boeckmann. “While we have posted strong results to date, we remain sensitive to the pace of global economic recovery which could impact the timing of future new awards.”
Given the strength results to date, the company is maintaining its 2009 EPS guidance at a range of $3.80 to $4.10 per share.
Business Segments
Fluor’s Oil & Gas segment reported second quarter revenue of $3.0 billion, down 9% from the second quarter of 2008, while segment profit grew by 7% to $181 million. Results were driven by a reduced level of project execution activity, offset by an increase in segment margin in the quarter. New oil, gas and petrochemical awards in the second quarter totaled $2.9 billion, including the $1.3 billion award for Imperial Oil’s Kearl oil sands project in Canada. Ending backlog at June 30, 2009 for Oil & Gas was $15.8 billion, a 25% decline from $20.9 billion a year ago.
Fluor’s Power segment reported revenue of $335 million, down 36% from $522 million last year. Segment profit increased to $27 million in the second quarter, compared with $25 million a year ago. Revenue declined as a large coal-fired project in Texas progressed closer to completion. Segment profit and margin improved due to favorable achievement of milestones on certain projects, and a greater mix of higher margin engineering and front-end projects. Power segment new awards were $192 million, and ending backlog for the quarter was $1.8 billion, compared with $1.9 billion a year ago.
