Fluor Corporation (FLR - Analyst Report) reported fourth-quarter 2014 earnings from continuing operations of $1.41 per share, which surpassed the Zacks Consensus Estimate of $1.10 and the year-ago quarter figure of $1.01.
Fluor Corporation - Earnings Surprise | FindTheBest
The quarterly earnings benefitted from the completion of several mining and metals projects and upstream oil & gas projects. Also, for the full year 2014, earnings per share came in at $4.48, up from $4.06 reported in 2013.
Inside the Headlines
Total revenue for the quarter decreased by 13.3% year over year to $5,455.2 million. The deterioration was primarily led by sluggish performance of the mining and metals business and negative impact from the timing of major capital investment decisions of the company. Revenues also fell short of the Zacks Consensus Estimate of $5,801 million.
For the full year, revenues declined substantially by 21.3% year over year to $21.5 billion.
In the reported quarter, Fluor inked contracts worth $6.3 billion. This included a $4.9 billion deal in the Oil & Gas segment, $712 million in Industrial & Infrastructure, $528 million in Power and $157 million in the Government segment. Consolidated backlog was $42.5 billion at year-end, highlighting an increase of 22% from the year-ago period.
In the fourth quarter, Fluor penned a settlement deal with counsel for the lawsuits filed against it regarding the Doe Run lead business. The company recorded an extra after-tax charge of around $6 million from discontinued operations of the business that was sold in 1994.
Q4 Segmental Revenues
Revenues from the Oil & Gassegment dipped 13.7% year over year at $2,590 million.
Revenues in the Industrial & Infrastructure segment dipped 23.2% year over year to $1,691.2 million.
Revenues in the Governmentsegment were up 8.8% year over year to $705 million.
Revenues in the Global Servicessegment declined 1% year over year to $156.7 million.
The Power Group segment reported a 10.8% increase in quarterly revenues to $312.3 million.
Liquidity
Fluor exited the year with cash and marketable securities of $2.4 billion, long-term debt of $991.7 million, and shareholders’ equity of $3.1 billion.
Share Repurchase
During the fourth quarter, Fluor authorized a share repurchase program worth $1 billion. Of which, the company bought around $500 million of shares in the reported quarter.
Outlook Revised
For 2015, earnings are projected in the range of $4.40–$5.00 a share, as compared to the previous range of $4.50 – $5.00. The Zacks Consensus Estimate for the same is currently pegged at $4.66.
The guidance includes the expected positive impact of the company’s approved share repurchase program and negative effects of slower spending by oil and gas segment customers.
Zacks Rank
Fluor currently has a Zacks Rank #4 (Sell). Some better-ranked stocks worth considering in the same sector include Willdan Group, Inc. (WLDN), Pernix Group Inc. (PRXG) and VSE Corp. (VSEC - Snapshot Report). While Willdan and VSE Corp. carry a Zacks Rank #1 (Strong Buy), Pernix holds a Zacks Rank #2 (Buy).
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