Infrastructure Giant Fluor Boasts Strong Q3 Earnings As Urban Solutions Segment Soars

Fluor Corp FLR reported a third-quarter (Q3) 2023 revenue growth of 9.7% year-over-year to $3.96 billion, beating the consensus of $3.89 billion.

Sales by segment: Energy Solutions $1.55 billion (-2.5% Y/Y), Urban Solutions $1.43 billion (+32% Y/Y), Mission Solutions $655 million (+2.5% Y/Y) and Others $324 million (+9.1% Y/Y).

FLR recorded a total segment profit of $276 million, compared to $31 million in 3Q22. The margin expanded to 7% from 0.9%.

Net earnings attributed to FLR improved to $206 million from $22 million a year ago.

Total new awards totaled $4.98 billion, a decline of 48.9% Y/Y. Ending consolidated backlog was $26 billion compared to $25.4 billion a year ago.

Adjusted EPS improved to $1.02 from $0.07 in 3Q22, beating the consensus of $0.56.

Adjusted EBITDA rose to $216 million from $30 million in 3Q22, and the margin expanded by 462 bps to 5.5%.

At the end of the quarter, Fluor’s cash and marketable securities were $2.4 billion, including amounts held by NuScale.

Additionally, the Irving, Texas-based company announced that its Mining & Metals business has been selected by BHP Canada to develop Stage 2 of its multibillion-dollar Jansen potash project in Saskatchewan. Fluor expects to recognize its undisclosed reimbursable contract value in 4Q23.

FY23 Outlook, raised: Fluor now sees adjusted EPS range to $2.50 to $2.70 (prior $2.00 to $2.30) versus consensus of $2.16

FLR sees an adjusted EBITDA of ~$600 million (prior to $500 to $600 million).

The company stated that the revised guidance reflects positive advances on large Energy Solutions projects and continued progress on projects in our legacy portfolio.

It reaffirms its FY26 guidance, adjusted EPS of $3.10-$3.60 and Adjusted EBITDA of $800 million-$950 million.

Price Action: FLR shares traded higher by 2.51% at $35.50 premarket on Friday.