While earnings from continuing operations were down at Fluor, Irving, Texas in the second quarter, the engineering and construction contractor said in a Friday press release it is reducing its debt and increasing its guidance for 2021.
In slides released ahead of a Friday earnings call, the company also confirmed that it was among the bidders for a potentially 10-year, $28-billion contract to manage the National Nuclear Security Administration’s (NNSA) Y-12 National Security Complex in Oak Ridge, Tenn., and the agency’s Pantex Plant in Amarillo, Texas.
In the second quarter, there was a net earnings loss from Fluor’s continuing operations of $14.4 million, or $0.08 per common share, for the second quarter ended June 30, compared with a net loss of $8.5 million, or $0.19 per share, in the year-ago quarter.
Quarterly revenue was $3.2 billion, down year-over-year from $3.7 billion.
Quarterly segment operating income for the Mission Solutions, where Fluor oversees its government contracting ventures such as those with the Department of Energy’s Office of Environmental Management, was $45 million, up from $10 million a year ago. Segment revenue was $707 million, down from $724 million in the year-ago period.
Quarterly results for the segment reflect “increased execution activity on DOE projects, higher than anticipated performance-based fees, and the release of COVID-19 cost reserves, offset by a decline in execution activity on army logistics and life support programs in Afghanistan and Africa,” the company said in the release.
“I am confident that we remain on the right path to achieve the strategic priorities that we established earlier this year,” said Fluor CEO David Constable in the press release. “Despite a charge on a legacy infrastructure project in the quarter, I am otherwise pleased with the progress we are making on the remaining fixed price projects in our portfolio.”
A Fluor-led team, Savannah River Nuclear Solutions, is the incumbent on the $15.8-billion operations contract for the DOE Savannah River Site in South Carolina. The current agreement is scheduled to expire at the end of next month, and a Fluor venture is seeking to land the replacement contract later this year, Constable said.
The NNSA pays for tritium harvesting and will eventually pay for construction of a new pit factory in South Carolina through the Savannah River Site landlord contract. Under the current contract, Fluor is handling construction of the Savannah River Plutonium Pit Production Facility, which the company is building from the partially completed Mixed Oxide Fuel Fabrication Facility.
Fluor is also involved with pits at the Los Alamos National Laboratory, where it is one of the two integrated industry subcontractors for prime Triad National Security.
Fluor is raising its full year adjusted earnings-per-share guidance from a range of $0.46 to $0.71 per diluted share to a range of $0.60 to $0.80 per diluted share. Initial and revised guidance reflects the impact of the higher share count and assumes a diluted share count of 170 million shares in the second half of the year.