Fluor Corporation has announced the financial results for its first quarter ended 31 March 2016. Net earnings attributable to Fluor for the first quarter were US$104 million, or US$0.74 per diluted share, compared to US$144 million, or US$0.96 per diluted share a year ago. Results for the quarter include US$22 million in pre-tax expenses associated with the recent acquisition of Stork and other matters. Excluding these expenses the company reported net earnings of US$120 million, or US$0.85 per diluted share. Consolidated segment profit for the quarter was US$241 million, compared to US$276 million a year ago. Segment profit results reflect reduced mining activities compared to a year ago. First quarter revenue of US$4.4 billion compares to US$4.5 billion in the prior year.
New awards for the quarter were US$4.7 billion, including US$2.3 billion in Government, US$1.4 billion in Industrial, Infrastructure & Power, US$579 million in Energy, Chemicals & Mining and US$404 million in Maintenance, Modification & Asset Integrity. Consolidated ending backlog of US$46 billion includes Stork’s backlog of US$1.5 billion. Consolidated backlog at the end of the first quarter last year was US$41.2 billion.
"Our new awards in the first quarter reflect the diversity of our business across multiple industries," said Fluor Chairman and Chief Executive Officer David Seaton. "Although some prospective projects have been deferred, and active projects slowed, this diversity shows we can continue to fuel long term growth in a challenging business environment. I'm particularly encouraged by the strength we see in infrastructure and government."
Corporate G&A expense for the first quarter of 2016 was US$55 million, compared with US$41 million a year ago primarily due to transaction costs related to the acquisition of Stork. Fluor’s cash and marketable securities balance at the end of the first quarter was US$2 billion. During the quarter, the company generated US$115 million in cash flow from operating activities, and paid out US$30 million in dividends.
Although new awards and backlog position the company well for the long term, clients in the Energy, Chemicals and Mining segment continue to extend projects and delay final investment decisions. This has resulted in a lower than anticipated trajectory for full year revenue. Taking this into consideration, the company is reducing its 2016 guidance range, originally issued in October, of US$3.50 to US$4.00 per diluted share to US$3.25 to US$3.65 per diluted share.
Fluor’s Energy, Chemicals & Mining segment reported segment profit of US$182 million, compared to US$218 million in the first quarter of 2015. Revenue of US$2.4 billion declined from US$3.0 billion a year ago primarily due to lower mining activities. New awards for the segment totalled US$579 million, and ending backlog was US$26.8 billion compared to US$29.7 billion a year ago.
The Industrial, Infrastructure & Power segment reported segment profit of US$12 million, compared to US$10 million in the first quarter of 2015. Revenue for the segment increased 52% to US$833 million from US$547 million a year ago. Results for the quarter reflect execution on two nuclear power projects for Westinghouse, partially offset by reduced activities in infrastructure. New awards in the first quarter were US$1.4 billion including the Loop 202 South Mountain Freeway Project in Arizona. Ending backlog for the segment was US$10.3 billion, up from US$4.8 billion a year ago.
The Government segment reported segment profit of US$17 million, compared to US$15 million a year ago. Revenue for the quarter was US$686 million, compared to US$646 million a year ago. First quarter new awards of US$2.3 billion include the Idaho Cleanup Project Core Contract and a multi-year extension of our Portsmouth project in Piketon, Ohio. Ending backlog was US$5.2 billion, up from US$4.2 billion a year ago.
The Maintenance, Modification & Asset Integrity segment reported a segment profit of US$30 million in the first quarter of 2016, compared to US$34 million a year ago. Revenue for the quarter was US$461 million compared to US$373 million in the first quarter of 2015. Results for the quarter reflect one month of contributions from the Stork business, offset by declines in the equipment business line. New awards totalled US$404 million for the quarter, and ending backlog was US$3.7 billion, up from US$2.5 billion a year ago.
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