Given the direction our world is headed in, there's a sometimes overlooked sector I'm paying increasingly close attention to. It's the engineering and construction group, and I'd urge Fools to pay heed to the results of Fluor (NYSE:FLR) and McDermott International (NYSE:MDR), two of the gang's big international players.
Both of the Texas-based companies did well in the quarter, although from a pure growth perspective, Fluor led the way. Its 119% jump in net earnings, to $209 million, was impressive, and its operating profit for the quarter more than doubled. It also received new awards totaling a record $6.4 billion, enough to push ts backlog up to a record $33 billion.
I find it especially interesting that the company's new awards included $1.8 billion for the Greater Gabbard Offshore Wind Farm power project in the United Kingdom. If, like a lot of us, you're looking for a way to play on the increasing attention the world is paying to wind energy, that may be an answer.
As for McDermott, its $177.5 million in net income for the quarter represented a 19% improvement year over year. That growth followed a 26% revenue increase.
The companies are both involved in oil and gas-related construction, and as you might suspect, both did well in that area. Fluor's Oil & Gas segment saw its revenue increase by 56% to $3.3 billion in the quarter, while its sector operating profit expanded by 68%. Its new oil, gas, and petrochemical awards in the quarter totaled $3 billion. As for McDermott, its Offshore Oil & Gas Construction unit checked in with revenue that grew by more than 50%.
Fluor and McDermott are in a league with Foster Wheeler (NASDAQ:FWLT), the Shaw Group (NYSE:SGR), and to a somewhat lesser extent, Jacobs Engineering (NYSE:JEC). All are benefitting from the global infrastructure boom, and all are posting stellar results. That only increases my belief that, especially considering the world's increasing attention to expanding both traditional and new energy forms, it's a group well worth Foolish attention.
Fluor is rated a four-star company by Motley Fool CAPS players, while McDermott has been awarded five stars. Would you reverse that order?
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