Engineering and construction conglomerate Fluor (FLR +16.92%) engineered an impressive gain for its stock as the trading week came to a close. That’s another way of saying that it posted a very strong set of second-quarter results, which were encouraging enough to propel its shares to a nearly 17% gain on Friday.
The fundamentals flew well higher
Before market open, Fluor reported that its revenue for the period was $4.3 billion, up a sturdy 9% year over year. That was helped to no small degree by the company’s more than tripling its new awards to $6.1 billion from $1.8 billion in the year-ago quarter.
Image source: Getty Images.
Net income not under generally accepted accounting principles (non-GAAP, or adjusted) leaped even higher, advancing by 79% to $129 million, or $0.91 per share.
That meant a pair of crushing beats for Fluor, as analysts tracking the stock were collectively modeling revenue of a bit over $3.9 billion and adjusted net profit of $0.70 per share.
In its earnings release, Fluor quoted CEO Jim Breuer as saying that the new business the company attracted shows “the successful pull-through of our front-end work and the confidence clients have in Fluor to advance their most important investments.”
Today’s Change
(16.92%) $8.25
Current Price
$57.00
Key Data Points
Market Cap
Day’s Range
$53.63 – $57.65
52wk Range
$39.33 – $57.65
Volume
8M
Avg Vol
2.8M
Gross Margin
-162.66%
New awards bring new optimism
Although Fluor did not provide revenue or bottom-line guidance, it modified its existing forecast for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Although it shaved the top end of this to $525 million from $560 million, it reflects the divestment in the company’s share of the ICA Fluor joint venture in Mexico. The bottom end of the range was maintained at $500 million.
In my view, investors were right to be so bullish on the company post-earnings. I’m particularly impressed by that leap in new awards, which clearly shows the company knows how to expand its business by one of the best methods possible. I think this stock has more potential upside.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
