Revenue: $4 billion for the first quarter. New Awards: $5.8 billion, with a book-to-burn ratio of 1.5. Backlog: $28.7 billion, with 79% reimbursable. Urban Solutions Profit: $70 million for the first quarter. Energy Solutions Profit: $47 million, down from $68 million a year ago. Mission Solutions Profit: $5 million, compared to $22 million a year ago. Adjusted EBITDA: $155 million, compared to $88 million a year ago. Adjusted EPS: $0.73, compared to $0.47 in the previous year. Cash and Marketable Securities: $2.5 billion as of March 31. Operating Cash Flow: Outflow of $286 million for the quarter. Share Repurchase: 3.6 million shares repurchased, spending $142 million in Q1. 2025 Guidance: Adjusted EBITDA of $575 million to $675 million; Adjusted EPS of $2.25 to $2.75. Operating Cash Flow Guidance: $450 million to $500 million for 2025.

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Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Fluor Corp (NYSE:FLR) reported strong consolidated new awards for the quarter at $5.8 billion, with a book-to-burn ratio of 1.5. The Urban Solutions segment, the largest and most diverse business, reported a profit of $70 million in the first quarter. Fluor Corp (NYSE:FLR) secured significant awards in life sciences and infrastructure, contributing to a total backlog of $28.7 billion. The company announced a new award from a leading pharmaceutical maker, showcasing its commitment to the life sciences market. Fluor Corp (NYSE:FLR) maintained its 2025 adjusted EBITDA guidance of $575 million to $675 million and adjusted EPS guidance of $2.25 to $2.75, indicating confidence in future performance.

Negative Points

Segment profit for Energy Solutions decreased to $47 million from $68 million a year ago, reflecting projects nearing completion and a reserve related to a long-completed project in Mexico. Mission Solutions reported a segment profit of $5 million, down from $22 million a year ago, due to a $28 million reserve from a recent ruling on a long-standing claim. Fluor Corp (NYSE:FLR) lost a recompete for the strategic petroleum reserve, potentially impacting future revenue. Operating cash flow for the quarter was an outflow of $286 million, compared to an outflow of $111 million a year ago, due to increased working capital on larger projects. The company faced a $477 million negative impact in Q1 due to the mark-to-market of its investment in NuScale, as their stock price decreased.

Q & A Highlights

Q: Can you elaborate on the change in client sentiment and which clients are more sensitive to market conditions? A: James Breuer, CEO: Most projects, especially in Urban Solutions and ATLS, are moving forward due to strong fundamentals. However, projects in energy and copper require more market certainty. We are hopeful for positive developments in trade negotiations, which could provide clarity. Our pipeline is strong, with 90% of underlying award revenue already engaged, similar to previous cycles.

Story Continues

Q: Your first-quarter EBITDA was strong. How does this align with your full-year guidance? A: John Regan, CFO: The first-quarter results included a significant tailwind from stock price-sensitive executive compensation. Adjusting for this, our results align more closely with the midpoint of our full-year guidance. We remain confident in our outlook.

Q: Given the slow decision-making environment, how do you view the second half of the year? A: James Breuer, CEO: While some projects like Dow have slowed, we don't see a widespread trend. We are working closely with clients on mitigation strategies and feel confident about our backlog's quality and conversion potential. We do not expect significant underutilization.

Q: Can you clarify the impact of project descoping on your quarterly results? A: John Regan, CFO: The descoping of two projects allowed us to accelerate profit recognition, contributing approximately $0.09 of EPS. This was part of our 2025 expectations, with a total impact of around $40 million in EBITDA.

Q: What is the status of your legacy projects in Mexico, and are there any ongoing risks? A: John Regan, CFO: Our joint venture in Mexico has several projects, most of which are nearing completion. We feel good about these projects and do not expect additional surprises. The recent reserve was related to a long-completed project.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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