There were numerous industrial stocks that were good and productive buys for investors in 2025. Fluor (FLR +1.72%), however, wasn't one of them.
In a see-saw year for the company that saw some dramatic misses in quarterly earnings and cost overruns, but also the sharp appreciation of a "hidden gem" asset, the stock ended up declining by more than 20% over the 12-month stretch.
The trouble with tariffs
The early part of 2025 was a time of tariffs. One of President Donald Trump's key priorities was to enact a new, sprawling regime of levies on this country's top trading partners.
Image source: Getty Images.
Although Fluor is a construction company that generally focuses on U.S. projects these days, and the tariffs didn't impact it directly, the company was still negatively affected. It was facing increased materials costs, which in some instances rose dramatically for businesses importing them into our country.
This impacted the company's performance, which was the second major factor contributing to the stock's unpopularity. In mid-February, it whiffed on both the top and bottom lines with its fourth-quarter earnings.
That bottom-line miss was particularly bad, as the company's net profit, not in accordance with generally accepted accounting practices (GAAP), was $0.48 per share -- barely in the same time zone as the $0.78 consensus analyst estimate.
First-quarter 2025 results were notably better, but we can't say the same for the second frame.
As in the final quarter of 2024, Fluor posted a double miss in the second quarter of the following year, with both revenue and non-GAAP (adjusted) profitability falling well short of analyst projections. Compounding that, it significantly cut its full-year earnings guidance.
NYSE: FLR
Key Data Points
The nuclear option
Not all was gloom and doom for Fluor last year. That hidden gem was the considerable stake it held in next-generation nuclear energy company NuScale Power. NuScale was riding high in mid-2025 thanks in no small part to the Trump administration's push to build out this country's nuclear power-generating assets.
Fluor bought a majority stake in NuScale for $30 million in 2011, a deal that included a clutch of convertible notes in the company. It continued to pump funds into NuScale, and by the time of NuScale's 2022 IPO, it had invested over $600 million.
Fluor started divesting its NuScale stake in 2025, mainly through a chunky ($605 million) block sale of shares in October. By the time New Year's rolled around, it had earned $969 million from the sales. The investor still has plenty left in the tank; the company's stake was recently estimated to be worth around $2.5 billion.
Fluor is a mainstay in the U.S. construction business, especially for large-scale infrastructure projects. With that, it's always going to be cyclical and at least partially dependent on this country's economy (and, to a lesser extent, the economies of foreign countries where it operates).
That NuScale stake, however, is the secret sauce that will help get the company through the challenging times. I think it tips this effective operator's stock into buy territory, particularly given the share price slump of 2025.
