Fluor adds to darkened engineering project outlook
SAN FRANCISCO (Reuters) - Fluor Corp (FLR.N), the largest publicly traded U.S. engineering company, and two rivals gave investors on Thursday few reasons to anticipate a bounce in project investment this year.
Fluor reported a lower quarterly profit and dropped its 2010 profit outlook as it anticipated only a gradual recovery in capital spending. Its shares fell 6 percent.
The Irving, Texas-based company cut its 2010 earnings per share range by 40 cents at both ends to $2.80 to $3.20, while its backlog declined further to $26.8 billion at the end of 2009 from $28 billion three months before.
That followed a slightly better-than-expected profit from rival Foster Wheeler AG (FWLT.O), which said the weak conditions that weighing it down would persist in 2010.
"The competitive dynamics for the energy-levered (engineering and construction) players right now are pretty acute. It's a dog fight for new project awards, even in areas where projects are flowing," said Jeff Spittel, an analyst with Pritchard Capital Partners in Houston.
Houston-based KBR Inc (KBR.N), another engineering and construction company, anticipated more activity in 2010, if not necessarily improved pricing.
Due to weaker U.S. Army contract awards, KBR had to slice 10 cents off the lower end of its anticipated 2010 earnings per share, bringing it down to a range of $1.50 to $1.80.
All three companies do a lot of work for the energy sector and have seen customers slow development of new projects over the past 18 months because of swings in energy prices and high construction costs.
Foster Wheeler Chief Executive Ray Milchovich did not give full-year guidance, but said the slowdown would likely have an "unfavorable" effect in 2010.
Fluor's fourth-quarter net profit fell to 82 cents per share, while analysts had been expecting 88 cents, according to Thomson Reuters I/B/E/S. Its shares fell 5.7 percent to $42.45 in after-hours trading.
Foster Wheeler's net income fell to 51 cents per share from 75 cents a year before. Adjusted for one-time items, it came in just ahead of what analysts expected. The company's stock shed 0.8 percent to $26.50 in regular trading.
KBR also topped estimates with earnings of 45 cents per share, down 17 percent. Its shares rose slightly to $20.34.
(Reporting by Braden Reddall; editing by Andre Grenon)
- Alabama man gets $1,000 in police settlement, his lawyers get $459,000
- Man arrested after jumping White House fence, causing lockdown
- Probe: Athletes took fake classes at University of North Carolina
- Attack on parliament, killing of soldier stun Canada's capital |
- A Minute With: Shailene Woodley on teen sex, violence and Marvel