Flour Corporation (NEW) (NYSE: FLR) stock fell over 17.24% on October 11th, 2018 (Source: Google finance) and opened weak this morning, falling over 0.7% on 12th October, 2018 (as of 10:32 AM GMT-4; Source: Google finance). The company warned of a third-quarter revenue shortfall leading to the weak stock sentiment. The company said that it expects revenue of $4.6 billion, below the FactSet consensus at the time of $4.95 billion. The company expects pre-tax earnings of $125 million for the quarter, which includes charges of $46 million related to close-out efforts on a project in Europe and $35 million for forecast revisions on a gas-fired power project in Florida. Fluor also said it had new awards of $9 billion, compared with the FactSet consensus for new business awards of $5.4 billion at the end of September. Analyst Daniel Scott at MKM Partners reiterated his neutral rating and $56 stock price target. “This quarter will likely, in the 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,” Scott wrote in a note to clients.
Meanwhile, FLR has successfully completed the construction of a high-performance adhesives manufacturing facility for Solvay in Wrexham, Wales. The plant was officially opened yesterday by Carmelo Lo Faro, president of Solvay’s Composite Materials Global Business Unit. Fluor performed engineering, procurement and construction management for the new facility. It was completed on a compressed schedule to meet the needs of Solvay. Solvay is a global supplier of carbon fiber, advanced composite materials, structural adhesives and surfacing films. Fluor had initially undertaken the front-end engineering design for the new facility at Wrexham Industrial Park, where Solvay already has a large manufacturing and research and development site. The project was executed by an integrated engineering team located in Fluor’s offices in the UK, U.S. and India.
On the other hand, Pre-tax earnings attributable to Fluor are anticipated to be approximately $125 million. Preliminary results include expected pre-tax charges of $46 million relating to close out efforts on a downstream project in Europe and $35 million for forecast revisions on a gas-fired power project in Citrus County, Florida. Preliminary results for the quarter also include a $124 million pre-tax benefit related to the Company’s sale of its Seagreen offshore investment. The company expects third quarter revenue of approximately $4.6 billion and new awards of approximately $9 billion.