Profits rose at Fluor Corp.’s Government division in the first quarter, and the segment checked in with big wins on major Energy Department cleanup jobs for the period ended March 31, the Irving, Texas-based engineering and construction giant announced late Thursday.
The win comes as overall profits in the quarter fell on a weaker performance by the company’s bread-and-butter Energy, Chemicals and Mining segment, according Fluor’s latest earnings press release.
At the Government division, which includes legacy nuclear-cleanup work performed in partnership with other companies under contract to DOE’s Office of Environmental Management, year-over year profit in the quarter rose more than 15 percent to about $17 million. That easily beats results for the comparable periods in 2015 and 2014 in a seasonally slow quarter for the company. Segment revenue, meanwhile, rose about 6 percent year over year to just over $685 million.
Headlining $2.3 billion in new awards for the segment — the single largest chunk of new business by far the company captured in the quarter — was the five-year, cost-plus Idaho Cleanup Project (ICP) Core contract. Including options, the deal is worth up to $1.4 billion for legacy waste remediation operations at the Idaho National Laboratory.
Also contributing was the two-and-a-half-year extension the company’s Fluor-BWXT joint venture received to continue decontamination and decommissioning work at DOE’s Portsmouth Site in Ohio, a onetime uranium enrichment facility. That option is worth about $870 million and keeps the company on the job through Sept. 30, 2018. A second option, which would extend the Portsmouth work through March 28, 2021, is worth just over $695 million.
The company’s Fluor Federal Services subsidiary also holds a three-year, $465 million contract to deactivate the gaseous diffusion uranium enrichment plant at DOE’s Paducah Site in Kentucky, which when out of service in 2013. The deal runs out July 31, 2017.
Overall, Fluor’s first-quarter profit fell almost 30 percent to 74 cents a share. An 18 percent drop in Energy, Chemicals, and Mining contributed to the drop. Revenue at the company’s flagship operating unit fell about 18 percent to $2.4 billion or so, for the quarter.
The revenue drop in the big segment was “due to reduced levels of project execution activities in the mining and metals business line and for certain large upstream projects progressing to completion,” Fluor said in its 10-Q filing. Also, “the mining and metals business has continued to slow as major capital investment decisions by most mining customers have been deferred,” Fluor said.
