Shares of Fluor Corporation (NYSE:FLR) tumbled more than 15% by 12:30 p.m. EDT on Thursday after the company preannounced lackluster third-quarter results.
Fluor said that it expects third-quarter revenue to be about $4.6 billion, which was well below the $4.95 billion that analysts anticipated. Furthermore, the company noted that pre-tax earnings would be around $125 million, which is lower than expected due to several issues. The company said that it would record $45 million in pre-tax charges related to the close of a downstream project in Europe and $35 million for forecast revisions for a gas-fired power plant project in Florida. Offsetting those issues would be a $124 million pre-tax benefit from the sale of Seagreen offshore. On a more positive note, the company won $9 billion of new business awards during the quarter, which was well above the analyst forecast of $5.4 billion.
Those lackluster results led MKM Partners to reiterate its neutral rating on Fluor's stock along with its $56 price target. In commenting on the move, an analyst at MKM wrote: "This quarter will likely, in our opinion, mark the eighth miss out of the last nine quarters, and despite strong new awards last quarter, this quarter, and likely next quarter, execution remains a concern."
On a call discussing the results, Fluor's CEO said that one of the issues was due to some internal problems, which the company has since addressed. He was also optimistic about what lies ahead given the strong contract awards, saying, "We are seeing the light at the end of the tunnel and it's not a train coming at us." That suggests the stock could bounce back if it can start executing, though that's a big if at this point.