November 3, 2011 / 8:31 PM / in 6 years

UPDATE 3-Fluor Q3, outlook short of estimates; shares drop

* Q3 EPS 78 cents vs 85 cents expected by Wall St

* 2012 EPS guidance of $3.40-$3.80 below average estimate

* Follows profit misses for rivals KBR, Foster Wheeler

* Fluor shares down 4 pct after hours

By Braden Reddall

Nov 3 (Reuters) - Fluor Corp , the largest publicly traded U.S. engineering company, posted third-quarter earnings short of estimates and gave an outlook for next year below what analysts expected, sending its shares down 4 percent.

It has been a generally disappointing quarter for U.S. engineering and construction firms. But Fluor’s backlog of work did show another quarter of growth, and Chief Executive David Seaton said he had not seen any real change in clients’ spending plans despite the macroeconomic worries.

Plus, Fluor’s board authorized a new buyback program for up to 12 million shares, or 7 percent of its outstanding stock.

The company forecast 2012 earnings per share of $3.40 to $3.80. Analysts on average were expecting $4.01, according to Thomson Reuters I/B/E/S.

The 2012 outlook assumed profit growth in all its divisions apart from power, and included the impact of 15 to 25 cents per share for funding its recently purchased nuclear technology firm NuScale.

Fluor’s third-quarter net profit was $135 million, or 78 cents per share, after a year-ago loss of $54 million, or 30 cents per share. The average estimate was 85 cents per share.

Revenue rose 10 percent to just over $6 billion, short of the average estimate of about $6.3 billion.

The Irving, Texas-based company reported a record backlog of $41.8 billion at the end of the third quarter, up from $40.3 billion three months before.

Chief Executive David Seaton told analysts that Fluor’s broad spread of market exposure, with 80 percent of its backlog outside the United States, was starting to pay off.

“I‘m really bullish on our ability to grow this thing beyond the $40 billion, but I’d only caution with that lumpiness word,” Seaton said. “There will probably be some quarters where our backlog will be reduced from the highs, just to return there or above in the out quarters.”

Asked about Fluor’s military support work in Afghanistan and Iraq, Seaton said he did not anticipate a reduction in the number of people it provided services for, even if those were not necessarily U.S. troops. “It’s about numbers of heads, not what that head looks like,” he added.

He tempered his comments at the start of the conference call by pointing out that Fluor employed seven of the 13 people killed in Afghanistan by a suicide bomb last Saturday.

Following the quarterly results that came after the close of trading on Thursday, Fluor’s shares fell 4 percent to $56, after gaining 5.4 percent in regular trading.

Rival KBR Inc posted profit short of estimates last week, followed by disappointing numbers from Foster Wheeler AG on Wednesday.

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