Publicly Traded Power and Environmental Giants Are at Full Tilt
Reports of solid profits and prospects by some of the construction industry’s largest publicly traded power, environmental and infrastructure giants had to be music to Wall Street’s ears. The good news was delivered at Credit Suisse’s engineering and construction conference, held on June 4 in New York City.
Fluor Corp. has a strong balance sheet and $2.3 billion in cash, Vice President Kenneth Lockwood told analysts and investors. “We think we’re doing well in a challenging environment,” he said. The firm reported $5.5 billion in first-quarter project awards, a $29.1-billion backlog and very little debt.
Lockwood is optimistic about winning a large military logistics support contract to be awarded in July in Afghanistan. CEO Alan Boeckmann acknowledged a slowdown in the firm’s oil-and-gas sector but said a large Kuwait refinery could be rebid.
John Prosser, chief financial officer at Jacobs Engineering Group Inc., Pasadena, Calif., sees a fall-off in past growth rates but still foresees 15% growth in 2009, fueled organically and by acquisition. “Oil and gas is a complex market, but it will continue to be good to us,” he said.
Prosser said clients in Canada’s hard-hit oil-sands region are “now talking to us” as oil prices exceed $60 per barrel. “Clients are now readily talking about spending money—a change in the past six months,” he said.
URS Corp. CEO Martin Koffel also noted his firm’s strong federal position. Koffel said the size of the federal stimulus earmarked for nuclear-waste cleanup was a “pleasant surprise” and will benefit existing contracts with the U.S. Dept. of Energy.
Chief Financial Officer Tom Hicks said URS is eyeing acquisitions in the power transmission and distribution market, where it is not a strong player. “It will be a good market, although I’m not sure if it will be great,” Hicks said. URS also is positioned to support nuclear powerplant projects using three different technologies.
“We’re very busy,” said Brian Ferriaoli, chief financial officer of the The Shaw Group Inc. “We’re growing even in a slow economy.”
CEO Jim Bernhard is bullish on the firm’s nuclear-power construction prospects. “There’s no reason our market share can’t be maintained or even increased,” he said. Bernhard said the firm’s overall track record in power engineer-procure-construct work gives it an edge in developing a nuclear-ready construction workforce.
