Fluor, Irving, Texas, suffered a net loss from continuing operations of $61 million compared with a net gain of $21.6 million during the first quarter of 2020, the international engineering and construction company said Friday.
A $68-million expense linked to development of its NuScale small modular reactor business, and other costs, contributed to the slide, the company said in its quarterly earnings release. The company has hired a financial firm to help it bring on NuScale investors.
Even with the NuScale costs, Fluor’s consolidated profit for its three business segments was $60 million compared to $55 million in the first quarter of 2020.
Company-wide revenue fell during the first quarter of 2021, but its government work for the Department of Energy and other agencies fared well.
Fluor ended the first three months of 2021 with $2.9 billion in revenue, down from $3.7 billion during the same quarter in 2020. Executives attributed the falloff in part to effects of the COVID-19 pandemic.
“Results for the quarter were consistent with our expectations as we start to work past the effects of COVID-19 on our projects and operations,” Fluor CEO David Constable said in a Friday earnings call with Wall Street investors. Most Fluor worksites stayed open at least on a limited basis throughout the health crisis. “The end of the pandemic seems to be in sight which is a relief to all of us,” Constable said.
It was a good quarter for Fluor’s Mission Solutions segment, the silo that quarterbacks the company’s Department of Energy joint venture activity and other government work.
Mission Solutions reported a profit of $44 million in the first quarter, up from $32 million in the first quarter of 2020. Revenue for the first quarter was $753 million, up from $746 during the same period a year ago. Quarterly results benefitted from favorable contract modifications on DOE projects “as well as the increase in performance scores on several projects,” according to the press release.
The company CEO specifically cited the recent DOE extension of the Fluor-BWXT team’s environmental cleanup contract at the Portsmouth Site.
“This quarter our Fluor-led joint venture won an extension for the Portsmouth decontamination and decontamination contract for the Department of Energy in Ohio,” Constable said. The DOE formally awarded the extension last month, more than a year after announcing plans for a one-year extension along with two six-month options that could keep Fluor-BWXT on the job until March 29, 2023.
“The DOE is a key long-term client and we look forward to continuing our support at Portsmouth,” Constable said during the call. The Fluor-led remediation team has been at Portsmouth since March 2011 under a contract now valued at $4.4 billion.
Fluor is also lead partner on a number of other contracts around the DOE weapons contracts, including operation of the Savannah River Site in South Carolina. The DOE last week issued a draft request for proposals on a new contract there. Fluor-led Savannah River Nuclear Solutions has been site manager since August 2008 under an agreement currently valued at $15.8 billion and set to expire in September. The DOE holds an option allowing it to extend the current deal by 12 months.
During the call, Constable also cited the retirement this week of Peter J. Fluor, great-grandson of company founder John Simon Fluor, from the Fluor board of directors. He is the last in a line of Fluor family members to serve as leaders within the company since its founding in 1912. Peter Fluor served on the company’s board of directors since 1984 in a variety of roles including as lead independent director from 2003 to 2020.
“Peter has continued the Fluor legacy: a commitment to excellence, integrity and ethics, always putting the safety and wellbeing of employees first, and recognizing that teamwork is a key component of our success,” Constable said in a press release this week.
