Fluor, McDermott post declines in Q3 earnings
Fluor Corp. released its third quarter results last week, posting earnings of $77 million, down around 20% from $94 million a year ago. Revenue was $4.7 billion, down from $4.9 billion the previous year, and less than the $4.95 billion analysts had predicted the company to reach.
The company did, however, post $9.6 billion in new awards for the quarter, led by the mining, industrial, infrastructure and power segment and followed by the sectors of government, energy and chemicals, and diversified services. The consolidated ending backlog rose to $34.9 billion from last year’s $32.9 billion.
“We believe our transformation to a data-driven, predictive analytics platform, combined with our fabrication capacity and craft labor workforce, can improve cost and schedule certainty for clients and stakeholders,” said David Seaton, Fluor chairman and CEO.
Corporate general and administrative expenses were $65 million, up from $46 million one year ago. Of the Q3 expenses, $21 million was related to United Kingdom pension settlement expenses and foreign currency exchange fluctuations.
McDermott International Inc. reported a net income of $2 million, down nearly 98% from $95 million in the corresponding quarter last year. The company said its net income was “unfavorably impacted by higher than expected tax expense.”
Those results also were impacted by costs of $103 million related to, in part, intangibles amortization and transaction costs associated with McDermott’s combination with CB&I, which it announced in May. The firm's adjusted net income was $89 million.
Third quarter revenue was $2.3 billion, compared to $959 million for the same period last year. That figure was driven by downstream projects in North, Central and South America, as well as offshore projects in the Middle East and North Africa.
Total backlog stands at $11.5 billion for the reporting period, which is the strongest it has been all year.
The company also announced it is seeking buyers for its tank storage and U.S. pipe fabrication businesses, noting that they “are not core to vertical integration.” McDermott anticipates it will realize proceeds exceeding $1 billion for the sale of both businesses and it plans to use that money to reduce debt under its term loan.
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