- On the same day — May 2 — that Fluor Corp. announced Carlos Hernandez would be stepping into the position of Interim CEO, replacing former CEO David Seaton, who resigned effective May 1, the company reported a net loss of $58 million for the first quarter of 2019 as compared to an $18 million loss for the first quarter of 2018.
- Excluding restructuring charges, foreign exchange losses and related tax impacts, Fluor’s first-quarter net loss was $19 million. The company’s Q1 revenue was $4.2 billion, down from $4.8 billion for the same period last year. Total backlog, however, was $39.3 billion at the end of the quarter versus $29 billion at the end of Q1 2018 — $17 billion in its energy and chemical business; $15 billion in its mining, industrial, infrastructure and power business; $4.2 billion in its government business; and $2.6 billion in its diversified services business.
- First-quarter wins for Fluor included a $1.3 billion contract for the Red Line and Purple Line Modernization Project for the Chicago Transit Authority and $1 billion of new projects for its energy and chemicals segment, including the Wanhua Chemical Complex on the Gulf Coast of Louisiana.
Another personnel shift at Fluor was the addition of former CEO Alan Boeckmann as executive chairman, a move that sources told Engineering News-Record is “just what the firm needs right now.” During his tenure as CEO from 2002 to 2011, Boeckmann pushed for the company to diversify from its focus on energy into other types of projects. Hernandez, who Boeckmann told analysts on a Q1 earnings call would lead the company in a "dramatic improvement in risk assessment, bidding processes and project execution,” said, according to a Yahoo Finance transcript, that more than 97% of the company’s projects were going well but that it was the remaining small percentage that was presenting the company with some challenges.
An executive at what ENR referred to as a Fluor competitor reportedly told ENR that because of low bids, the company's large backlog might not be as stable as it should be.
Often a change in leadership is what the investing community and stockholders want to see when they believe management is contributing to underperformance. In March, AECOM shareholders voted to retain incumbent board members, including chairman and CEO Michael Burke despite a few calls for a shakeup. Shareholder and investment firm Engine Capital encouraged stockholders to oust those board members up for reelection, claiming they approved executive compensation, which the firm said was too high given the company’s relatively poor performance during the last several years. Engine said, for instance, that Burke had received almost $80 million in total compensation since he took over in March 2014, despite the company’s stock being down 9% compared to the S&P 500’s 44% gain.