Fluor falls short as mining work slows, awaits NuScale
(Reuters) - Fluor Corp (FLR.N) reported a decline in its backlog on Thursday due to two mining project cancellations, while quarterly profits and its 2013 outlook fell short of analyst estimates.
Shares of Fluor, the largest publicly traded U.S. engineering company, dropped 3.4 percent to $55.72 in after-hours trading on Thursday.
The company is also still looking ahead to a long-awaited decision on whether its nuclear venture, NuScale, will get U.S. federal funding. Chief Executive David Seaton said he believed it was "held up in the normal bureaucracy."
Seaton saw Fluor's overall 2013 outlook tempered by the weak global economy and the deferral of big mining capital programs.
"The industry is just taking a deep breath in the face of the economy that we all see," Seaton told analysts on a call, referring to the two removed mining projects worth $2 billion. "I wouldn't categorize them as being canceled."
The breakdown of the two projects was about two-thirds Peru and a third Australia, Fluor said, and their removal knocked the overall backlog down to $40.8 billion at the end of the third quarter from $43 billion three months before.
As for the anticipated resurgence in oil and gas, Seaton believed that would be felt more in 2014 than next year.
Fluor's third-quarter net profit was $145 million, or 86 cents per share, compared with $135 million, or 78 cents per share, a year earlier. Revenue grew 18 percent to $7.1 billion.
Analysts had expected earnings of 97 cents per share, according to Thomson Reuters I/B/E/S.
Fluor also issued a forecast for 2013 earnings of between $3.85 and $4.35 per share, below the average forecast of $4.40.
Part of what is cutting into earnings this year and next is its investment in NuScale, an Oregon-based nuclear technology developer, which saw 2012 costs rise to between 25 cents and 30 cents per share from the 15 cents to 25 cents once expected.
Fluor is awaiting a decision on whether the Department of Energy will provide funding for NuScale. A decision on which two companies will split a $452 million grant had been expected in September.
That anticipated cash influx would offset higher spending and mean the cost of NuScale in 2013 would be about the same as 2012, Fluor Chief Financial Officer Biggs Porter said.
But Seaton insisted the delay had not fundamentally changed anything.
"It doesn't change our opinion on the technology or its application," he said. "Nor does it lessen the interest in NuScale from outside parties that we would expect to bring in as partners."