- Q2 2022 diluted earnings per share (EPS) from continuing operations of $0.38; adjusted diluted EPS from continuing operations of $0.13
- Company introduces full year adjusted EBITDA guidance range of $380 to $430 million, consistent with original expectations for 2022
- Q2 new awards of $3.6 billion with ending backlog of $19.5 billion
- NuScale de-SPAC transaction completed in Q2; Fluor’s ownership is 57%
Fluor Corporation announced financial results for its second quarter ended June 30, 2022. Revenue for the quarter was $3.3 billion and net income from continuing operations attributable to Fluor was $66 million, or $0.38 per diluted share. Consolidated segment profit for the quarter was $108 million compared to $95 million in the second quarter of 2021. Results for the quarter include charges on the Gordie Howe legacy infrastructure project. Results also reflect higher than anticipated tax expenses, currency fluctuations and include contributions from Stork and AMECO. Excluding the results of these entities that continue to be marketed for sale together with certain other adjustments outlined in the reconciliation table at the end of this release, adjusted earnings per diluted share were $0.13.
“Our new awards for the quarter demonstrate that clients are moving forward with capital spending plans in a challenging business environment,” said David Constable, chairman and chief executive officer of Fluor. “Although I am disappointed with the performance to date on a few legacy infrastructure projects, our strategic priority to pursue contracts with fair and balanced terms continues to drive a healthier backlog with as-sold margins above our expectations.”
Second quarter new awards were $3.6 billion compared to $1.7 billion a year ago. Ending consolidated backlog was $19.5 billion. Corporate general and administrative expenses for the second quarter of 2022 were $45 million compared to $33 million a year ago due primarily to increased legal costs. Fluor’s cash and marketable securities at the end of the quarter were $2.2 billion.
Outlook
Fluor is tightening its full year adjusted earnings per share (EPS) guidance from a range of $1.15 to $1.40 per diluted share to a range of $1.15 to $1.35 per diluted share. The new range reflects a higher effective tax rate due to our current mix of global earnings and includes the impact of foreign currency translations and project charges in the second quarter. The company believes the effective tax rate in 2023 will decline as earnings increase in the United States. Adjusted EPS guidance excludes entities that continue to be marketed for sale and other considerations outlined in the reconciliation table at the end of this release.
The company is also introducing adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance to provide for a better understanding of the underlying performance of the business. For 2022, the company anticipates a full year adjusted EBITDA range of $380 to $430 million. The guidance for full year adjusted EBITDA is generally consistent with the assumptions supporting the original adjusted EPS guidance range after considering project performance in the second quarter. Adjusted EBITDA expectations for the second half will be driven by improved bookings, increased project gross margin and lower segment overhead.
Business Segments
Energy Solutions reported a profit of $65 million in the second quarter compared to $109 million in the second quarter of 2021. Results include foreign currency impacts, cost growth and estimated recoveries on a legacy upstream project, mostly offset by an embedded derivative gain of $17 million. Segment profit for the second quarter of 2021 benefitted from the negotiation of change orders, scope increases and cost improvements on numerous projects. Revenue for the quarter was $1.3 billion – flat from a year ago. New awards in the quarter totaled $1.3 billion, compared to $661 million in the second quarter of 2021, and included a lithium chemicals project in China, a refinery upgrade project in Mexico and a mid-scale liquefied natural gas project offshore the U.S. Gulf Coast. Ending backlog was $8.4 billion compared to $10.6 billion a year ago.
Urban Solutions reported a profit of $8 million in the second quarter compared to a $68 million loss in the second quarter of 2021. Segment profit in the quarter reflects $32 million in project charges for additional inflation and cost growth on the legacy Gordie Howe infrastructure project. We believe that these costs may be partially recoverable under the contract. Results also reflect an additional charge for cost inflation and rework on two legacy infrastructure projects. Revenue for the second quarter declined to $1 billion from $1.2 billion a year ago due to the completion of mining and metals projects in Australia and North America and data center projects in Europe. New awards for the quarter totaled $1.9 billion, compared to $617 million in the second quarter of 2021, and included a rare earth mining project in Australia and a highway project in Texas. Ending backlog was $7.7 billion compared to $8 billion a year ago.
Mission Solutions reported a profit of $28 million in the second quarter compared to $45 million in the second quarter of 2021. Revenue for the second quarter declined to $547 million from $707 million a year ago. The decrease in revenue and profit for the quarter reflects the completion of a DOE project in Idaho and the favorable closeout of LOGCAP IV in Afghanistan a year ago. New awards for the quarter totaled $52 million, compared to $92 million in the second quarter of 2021. Ending backlog was $1.9 billion compared to $2.4 billion a year ago.
The Other segment, which includes Stork, AMECO and Fluor’s 57 percent ownership in NuScale, reported revenue of $417 million and a segment profit of $7 million. The company believes that NuScale and their carbon-free energy solution represents significant value to our shareholders.
