Fluor 2025 Q1 Earnings Misses Targets as Net Income Drops 680%

Fluor Corporation reported its fiscal 2025 Q1 earnings on May 2nd, revealing mixed results. The company's revenue rose by 6.6% year-over-year to $3.98 billion, yet fell short of the expected $4.18 billion. Adjusted EPS improved to 73 cents from 47 cents a year ago, exceeding the consensus of 50 cents. Fluor confirmed its 2025 outlook, maintaining adjusted EBITDA guidance between $575 million to $675 million and adjusted EPS guidance of $2.25 to $2.75, in line with expectations.

Revenue
Fluor's revenue for the first quarter of 2025 reached $3.98 billion, marking a 6.6% increase compared to the previous year. Urban Solutions emerged as the leading segment, generating $2.16 billion, while Energy Solutions contributed $1.21 billion. Mission Solutions added $597 million, and the Other segment accounted for $22 million. This diverse revenue performance highlights Fluor's strategic focus across various sectors.

Earnings/Net Income
Fluor experienced a significant downturn in its earnings for 2025 Q1. The company reported a loss of $1.42 per share, a stark contrast to the profit of $0.35 per share in 2024 Q1, reflecting a 505.7% negative change. Furthermore, the net loss amounted to $232 million, a deterioration of 680.0% from the previous year's net income of $40 million. The EPS performance was clearly disappointing.

Price Action
The stock price of Fluor has dropped 4.73% during the latest trading day, has edged up 0.59% during the most recent full trading week, and has edged down 1.60% month-to-date.

Post-Earnings Price Action Review
Analyzing the impact of earnings report metrics on Fluor Corporation’s stock price from May 2, 2020, to May 2, 2025, reveals intriguing insights. Revenue-related events showed a 45.45% win rate over a 3-day period, increasing to 59.09% over 10 days and 72.73% over 30 days, suggesting short-term negative impacts are common, but longer-term trends tend to be positive. Similar patterns are observed for net income and EPS-related events, with 10-day win rates at 59.09% and 30-day win rates at 72.73%. The maximum return following these events was 17.62%, occurring on day 77 post-event. These findings indicate that while short-term volatility exists, investors may benefit from a long-term strategy focused on the company’s fundamentals and growth potential.

CEO Commentary
James Breuer, CEO, emphasized that Fluor's strategy is evolving from "fix and build" to "grow and execute," focusing on generating cash and earnings while maintaining financial discipline. He noted strong revenue performance with $4 billion in Q1 and a robust backlog of $28.7 billion, driven by significant awards in Urban Solutions and life sciences. Breuer highlighted the importance of client relationships and the commitment to project delivery as a core value. He expressed optimism about the continued demand in the life sciences and infrastructure sectors, stating, "Clients are forging ahead with projects where there is a clear time to market driver."

Guidance
Fluor maintains its 2025 adjusted EBITDA guidance of $575 million to $675 million and adjusted EPS guidance of $2.25 to $2.75, with operating cash flow expectations between $450 million and $500 million. The company anticipates a revenue growth of approximately 15% for the year, with a book-to-burn ratio above 1 and segment margins projected at 4% to 5% for Urban Solutions, 3.5% to 4.5% for Energy Solutions, and 5% to 6% for Mission Solutions. The effective tax rate is expected to rise closer to 30% for the full year.

Additional News
Fluor Corporation has been actively engaging in share repurchase activities, accelerating its buyback program in the first quarter of 2025 to $142 million, with a target of $600 million for the year. This move reflects Fluor’s commitment to returning value to shareholders amid uncertain economic conditions. Additionally, the company reported $5.8 billion in new awards, with 87% being reimbursable, although this represents a 17% decrease year-over-year. The backlog fell by 12.3% to $28.7 billion, while the legacy project backlog dropped 53% to $585 million. Fluor continues to address potential economic uncertainties with clients, focusing on maintaining its strategic guidance and ensuring robust operational performance.