In its last delayed quarter-results filing for 2020, caused by previous government and internal audits of project charges, Fluor Corp. reported a revenue shortfall linked to COVID-19 but better-than-expected profit figures.
Its Dec. 10 numbers release for the third quarter, which ended Sept. 30, noted $23.4 million in earnings from continuing operations, compared with a $754.1-million loss in the same period last year.
Analysts were buoyed by no further project charge disclosures, which had triggered the results probes that began in 2019.
“Fluor is now current with all its financial filings and debt obligations,” said Credit Suisse analyst Jamie Cook. “Problem projects continue to be on schedule … reflecting better execution.”
Its overall revenue of $3.8 billion fell from $4.6 billion in last year’s third-quarter and was below analysts’ estimate, with Fluor noting staffing challenges and delayed project investment decisions.
Backlog declined 4%, with $543 million removed as the contractor has exited the Maryland Purple Line rail public-private project.
But profit margins rose for Fluor’s energy and chemicals unit, “the highest in several years,” said UBS construction sector analyst Steven Fisher. Fluor will update 2021 guidance in February with its back-to-schedule year-end results report
Meanwhile, there was a new skirmish in Fluor’s lingering legal battle with Zurich American Insurance Co. over its coverage of an estimated $300 million in pollution claims linked to a Missouri lead smelter the contractor once owned.
A U.S. district court on Dec. 9 ordered new sanctions against the insurer, which were not disclosed, which relate to documents it did not provide Fluor earlier in the case that the contractor contends could have lessened the amount of claims paid.
But the court declined Fluor’s request to dismiss the suit and it set a trial for next summer.