Fluor Chairman and CEO David Seaton said Thursday the company remains in pursuit of a multibillion-dollar liquid waste management contract at the Savannah River Site in South Carolina that the Department of Enregy is due to award again in a few weeks.
Seaton offered his comments, without elaboration, during Fluor’s quarterly earnings call with Wall Street analysts. Fluor posted second-quarter earnings of $115 million, or $0.81 per diluted share, compared to a net loss of $24 million, or $0.17 per diluted share a year ago.
A Fluor-Westinghouse team in 2017 was one of three bidders to take over management of more than 30 million gallons of liquid waste stored at Savannah River, a byproduct of Cold War nuclear weapons production at the facility. Last October, DOE awarded the $4.7 billion, 10-year contract to a partnership of BWX Technologies, Bechtel National, and Honeywell. But both losing bidders protested, and the Government Accountability Office upheld the complaint from the AECOM-CH2M venture. That forced DOE’s nuclear cleanup office to revisit the solicitation. A new contract award is expected in September.
In addition, Seaton said Fluor hopes to win liquid waste management business at the Hanford Site in Washington state. It was not clear what procurement the CEO was discussing, and a Fluor representative declined to elaborate. The Energy Department has said it intends to extend the Washington River Protection Solutions tank waste management contract at Hanford for up to one year, to Sept. 30, 2019. The federal agency has not yet issued a draft RFP for a follow-on contract.
Seaton also touted some recent Fluor wins in the government sector. Fluor is an integrated subcontractor to Triad National Security, the University of California-Texas A&M University-Battelle Memorial Institute venture that on Nov. 1 will take over management and operations of the Energy Department’s Los Alamos National Laboratory in New Mexico. The contract is worth roughly $20 billion over 10 years, with options.
Fluor Marine Propulsion in July won major nuclear-warship support contracts, worth up to a combined $30 billion over 10 years, from the National Nuclear Security Administration and the Navy. The contract is for management of the multi-site Naval Nuclear Laboratory complex, which covers sites in New York, Pennsylvania, Idaho, and South Carolina.
The company’s quarterly consolidated profit for its business segments was $194 million, compared to $15 million a year ago. Company-wide revenue for the latest quarter was $4.9 billion, which eclipsed $4.7 billion from the prior year.
New awards for the quarter ended June 30 amounted to $5.4 billion, with $3.6 billion in Mining, Industrial, Infrastructure & Power, $742 million in Government, $513 million in Diversified Services, and $493 million in Energy & Chemicals. Consolidated ending backlog was $29.3 billion, up from $29.1 billion in the first quarter of 2018.
The Government sector includes Fluor’s contracts with DOE’s Office of Environmental Management, which is charged with cleanup of 16 former and active nuclear sites around the country, and the department’s semiautonomous National Nuclear Security Administration, stockpile steward for the U.S. nuclear deterrent.
The Government line reported segment profit of $51 million, compared to $20 million a year ago. Revenue for the quarter was $863 million, compared to $744 million a year ago.
The Government sector’s revenue for the first six months of 2018 was almost $2.2 billion, compared to $1.5 billion for the first six months of 2017. Backlog for that business line was almost $2.3 billion as of June 30, compared to $4 billion at the same point in 2017.
The Irving, Texas-based construction and engineering company is a big player within the Energy Department complex. It has cleanup management roles at the Portsmouth Site in Ohio and the Idaho Site. Fluor-BWXT Portsmouth’s current 30-month option period for decontamination and decommissioning at Portsmouth expires on Sept. 30. The contract, which dates to March 2011, has a potential value of $3.4 billion.
The Energy Department projects generated almost no questions or comments from financial analysts during the hourlong earnings call.
Problems in the market for construction of new gas-fueled plants for the electric power sector continue to drag down Fluor’s numbers, although the company is benefitting from an expanding market for liquified natural gas infrastructure projects.
The previously announced 2018 company-wide guidance remains in the range of $2.10 to $2.50 per diluted share.
