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Fluor reports 4Q18 and 2018 results

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Fluor Corporation has announced financial results for its fiscal year ended 31 December 2018.

Earnings attributable to Fluor were US$225 million, or USUS$1.59 per diluted share, compared to 2017 earnings of US$191 million, or US$1.36 per diluted share. Earnings attributable to Fluor in 2018 were negatively impacted by US$79 million, or US$0.56 per diluted share, for the establishment of a valuation allowance on deferred tax assets. Excluding this non-cash item, adjusted earnings attributable to Fluor for 2018 were US$304 million, or US$2.15 per diluted share. Consolidated segment profit for the year was US$602 million, up from US$545 million a year ago. Revenue of US$19.2 billion in 2018 compares to US$19.5 billion in the prior year. Full year new awards more than doubled to US$27.7 billion, consisting of US$10.6 billion in Energy & Chemicals, US$10.8 billion in Mining, Industrial, Infrastructure & Power, US$4.1 billion in Government and US$2.1 billion in Diversified Services. Consolidated backlog at year-end was US$40 billion.

“In 2018 Fluor continued to transform our approach to address the rapidly changing global markets and set the foundation for long-term sustainable growth,” said David Seaton, Fluor chairman and chief executive officer. “Despite the challenges we encountered last year, we enter 2019 with a sizeable backlog and a compelling integrated solution for the end markets we serve.”

Corporate G&A expense for 2018 was US$148 million, down from US$192 million a year ago. Expenses for the year decreased primarily due to favourable foreign exchange fluctuations. Fluor’s cash and marketable securities at the end of the year was US$2.0 billion. During 2018, the company paid out US$119 million in dividends and repurchased US$50 million of Fluor shares.

Earnings for 4Q18 were US$50 million, or US$0.36 per diluted share. Excluding US$58 million, or US$0.41 per diluted share in non-cash tax charges related to the valuation allowance previously mentioned, adjusted earnings attributable to Fluor for 4Q were US$108 million, or US$0.77 per diluted share. Results for 4Q18 include a pre-tax charge of US$72 million for a gas-fired power project and a downstream project, both now online, and an offshore project. Segment profit for 4Q18 was US$149 million, down from US$195 million a year ago. Corporate G&A expenses in 4Q18 declined to US$8 million, compared with US$54 million a year ago, due to favourable foreign exchange fluctuations and lower stock-based compensation expense. Revenue for the quarter was US$4.8 billion and new awards were US$10.1 billion.

For 2019, Fluor is establishing its initial EPS guidance at a range of US$2.50 to US$3.00 per diluted share, excluding any impact of foreign exchange fluctuations. Guidance for 2019 assumes increasing contributions and a balanced set of opportunities from the company’s Energy & Chemicals and Mining, Industrial, Infrastructure and Power segments.

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