Fluor (FLR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $4.2 billion, up 7% year-over-year, with consolidated segment profit of $194 million and adjusted EBITDA of $165 million; net earnings attributable to Fluor were $169 million, up from $61 million in Q2 2023.

• Backlog grew to $32.3 billion, up from $29.4 billion at year-end, with 81% reimbursable and strong new awards in Urban Solutions and advanced technology projects.

• Adjusted EPS was $0.85, up from $0.76 year-over-year, benefiting from a lower tax rate and increased revenue from tax-advantaged locations.

• Operating cash flow improved to $282 million, a significant turnaround from a $62 million outflow in Q2 2023, driven by joint venture distributions, customer payments, and a $77 million IRS refund.

• Major management changes announced, including new COO, Group President Energy Solutions, CPO, and CLO effective August and October 2024.

Financial highlights

• Consolidated segment profit was $194 million; G&A expenses decreased to $50 million from $60 million year-over-year; net interest income was $38 million.

• Cash and marketable securities stood at $2.6 billion, excluding NuScale holdings.

• Adjusted net earnings for Q2 were $148 million; adjusted EBITDA was $165 million, down from $181 million a year ago.

• Received a partial IRS refund of $77 million in the quarter; additional IRS refunds of $90 million are expected later in 2024.

• Effective tax rate for Q2 2024 was 28.5%, down from 48.1% in Q2 2023.

Outlook and guidance

• 2024 adjusted EPS guidance affirmed at $2.50–$3.00; adjusted EBITDA guidance narrowed to $625–$675 million; operating cash flow guidance raised to $500–$600 million.

• Revenue growth for 2024 expected at approximately 15%, with G&A expense around $215 million and an effective tax rate of 30–35%.

• Segment margin expectations: ~5% in energy solutions, ~4% in urban solutions, ~6% in mission solutions.

• Book-to-burn ratio expected to remain at 1 for the third consecutive year.

• Management expects sufficient liquidity for at least the next 12 months, supported by strong cash balances and unused credit capacity.