What happened

Shares of construction and engineering giant Fluor (FLR -1.29%) stock popped in Friday trading after reporting earnings Thursday evening, up 12.4% as of 2:20 p.m. EDT, and that's not even the weird part.

The weird part is that Fluor lost money -- a lot of money -- in this Q3 report.  

A man on a ladder drawing a stock chart rising very high

Image source: Getty Images.

So what

As management explained, Fluor's continuing operations recorded a $5.57 per-share loss in Q3, versus a $0.49 profit a year ago. That sounds pretty bad; analysts were actually hoping Fluor would report a profit of $0.39 per share this past quarter.

Of course, Fluor was ready with an explanation: The swing from a quarterly profit to a quarterly loss was caused by

... a non-cash charge of $546 million related to establishing a valuation allowance against net deferred-tax assets, a non-cash impairment charge of $290 million related to the COOEC-Fluor joint venture fabrication yard, Stork, and the Sacyr-Fluor joint venture in Spain, and $44 million for restructuring activities.

In other words, "one-time charges" were the reason, and if those were truly one-time in nature, and won't recur, then the news isn't as bad as it sounds.

Now what

In short, Fluor gave its investors permission to look past Q3's numbers and focus instead on how Fluor will perform in the future. In that regard, CEO Carlos Fernandez assured investors that Fluor's "strategic review" is now "complete," its "restructuring under way," and "Fluor is focused on returning to excellence in our operations and consistent profitability" and growing once again.

In support of this, he predicted that Q4 will see a return to positive profit margins:

  • 4% to 5% for both the energy & chemicals and diversified services divisions
  • 2% each for the mining & industrial business and for infrastructure & power

Investors like the sound of that.