Fluor Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Fluor (NYSE: FLR  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Fluor has seen its prospects soar because of the huge expansion in the energy industry in recent years. With new engineering projects popping up around the world, can Fluor reap its fair share of the profits? Let's take an early look at what's been happening with Fluor over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on Fluor

Analyst EPS Estimate

$0.98

Change From Year-Ago EPS

8.9%

Revenue Estimate

$7.20 billion

Change From Year-Ago Revenue

15.2%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Will Fluor engineer success this quarter?
Analysts have been rock-solid in their estimates on Fluor, keeping earnings-per-share consensus unchanged over the past three months. The stock, though, has risen to new heights, gaining nearly 25% since mid-November as the energy sector has performed quite well in the recent market advance.

Energy projects have been a big part of what has created a massive backlog of orders for Fluor. Even as the industry has slowed down because of supply gluts and low natural-gas prices, Fluor still has more than $40 billion of business in its pipeline, dwarfing the backlogs that McDermott (NYSE: MDR  ) and other industry rivals have managed to build up.

But Fluor's expertise goes beyond the energy industry. Barrick Gold (NYSE: ABX  ) has hired the company to help it manage the construction of its Pascua Lama project. With an estimated $7 billion to $8 billion budget, the deal will both boost Fluor's top-line growth as well as helping cement its reputation in the fast-growing mining industry. Moreover, even though the nuclear power industry took a big hit after the Fukushima Daiichi disaster in Japan, Chinese expansion of nuclear energy should boost prospects of Fluor and rival Foster Wheeler (NASDAQ: FWLT  ) , both of which bring their engineering and construction expertise to the industry.

One interesting element of the engineering business right now is the potential for consolidation. Just last week, Chicago Bridge & Iron (NYSE: CBI  ) completed its buyout of engineering and services firm Shaw Group, boosting its size to directly challenge Fluor's leadership in the industry.

In Fluor's earnings report, watch closely at whether the company is able to bounce back from a disappointing report last quarter. Having issued somewhat disappointing guidance for 2013, Fluor needs to lay the groundwork for how it expects to bolster growth to take advantage of a broader economic rebound when it comes.

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