Fluor Flourishes on International Exposure

The dichotomy between infrastructure stocks which rely on the US market and those which rely on overseas markets continues - much like equities in general. Fluor (FLR) is out with a great earnings report, and boosted guidance range. Much like Foster Wheeler (FWLT), Fluor has tremendous overseas exposure along with heavy concentration on energy resources. Note, due to a tax treatment, the real earnings estimate was $1.47, still a huge beat vs analysts expectations. Backlogs continue to explode upward, with $6 Billion of new awards this quarter, and $30B in backlog in total. Again, as with many of these infrastructure names, this is nearly 2 years of visibility we have with contracts already locked in.

• Engineering and construction company Fluor Corp. said Thursday its fourth quarter profit more than tripled on higher sales and a large tax benefit. Net income for the three months ended Dec. 31 rose to $259.5 million, or $2.82 per share, compared with $80.7 million, or 90 cents per share, during the same period a year earlier. The most recent quarter included a tax settlement from the Internal Revenue Service of $123 million, or $1.35 per share.
• Analysts expected the company to earn $1.18 per share, on average, according to a survey by Thomson Financial.

• Revenue jumped to $4.71 billion from $3.63 billion. Fluor attributed the growth to improvements in its oil and gas, industrial and infrastructure, and power segments. Analysts predicted revenue of $4.55 billion.

• Engineering and construction company Fluor Corp. on Thursday raised its 2008 profit forecast, moving the estimate closer in line with Wall Street expectations. The company said it now expects to earn $5.10 to $5.50 per share, up from a previous range of $4.90 to $5.30 per share.

• Full year new awards rose to an all-time high of $22.6 billion, up from $19.3 billion a year ago, driven by increases in Oil & Gas, Power and Global Services. Fourth quarter new awards of $6.3 billion set a record for a single quarter and drove year-end backlog to $30.2 billion, the company’s ninth consecutive quarterly increase and up 38 percent from the end of last year.

• Fluor expects continued strength in downstream oil and gas, polysilicon production, power generation and pollution reduction, mining and operations and maintenance businesses.

Disclosure: Long Fluor, Foster Wheeler in fund and personal account

Comments

[Javaharv:]

Mark look at ABB compared to FLR - They track each other, but tend to.

By the way, this market is shaping up to provide some very good values after the dust clears. I am one of those long time bulls that had a gut feeling that we had not seen the bottom yet. Then feeling not so great seeing the market regain a chunk of the last sell off after going into cash with a large percentage of my portfolio, which I never had done before.

So we will have a great buying opportunity soon, so are you collecting any great looking companies that are being thrown out with the bath water???

2008 Mar 01 07:53 AM