Fluor Chairman and CEO David Seaton on Thursday lauded two Department of Energy contract extensions for programs led by the company and expressed optimism about winning more business during the fourth quarter.
The Fluor-led Savannah River Nuclear Solutions team, which manages the Savannah River Site in South Carolina, received a 12-month contract extension from in July, keeping it on the job through July 2019. The contractor team was at the end of its 10-year, $9.5 billion deal.
In September Fluor-BWXT Portsmouth received its final 30-month extension fon its 10-year cleanup contract, now worth $3. 7 billion. Fluor-BWXT will now stay on the job through March 2021.
The company is also “well positioned to win the liquid waste contract at Savannah River,” Seaton said during a conference call to discuss the Dallas-based company’s third-quarter earnings.
A Fluor-Westinghouse team is one of three bidders in the hunt for reissuance of a 10-year, multibillion-dollar agreement for liquid waste management at SRS, which could be awarded any time now. A team led by BWX Technologies initially won a $4.7 million contract in October 2017. Bid protests were filed both by Fluor-Westinghouse and a team comprised of AECOM and CH2M. In February, the Government Accountability Office ruled DOE had not properly vetted the technical approach put forth by the winning bidder.
The Energy Department contracts did not generate any questions from the analysts during the call.
For the quarter ended Sept. 30, Fluor earned $77 million in net income, or $0.55 per diluted share, compared to $94 million, or $0.67 per diluted share, one year ago. The engineering, procurement, and construction company’s revenue of $4.7 billion for the quarter was down from $4.9 billion a year ago.
Consolidated profit was $207 million in the recent quarter, up from the $203 million on a year-over-year basis.
Fluor landed $9.6 billion in new awards for the quarter, much better than the $3.8 billion it took in a year earlier. Of that, $3.3 billion was in in Fluor’s Government segment, which includes the DOE business contract extensions, up from only $234 million in third-quarter 2017.
Along with its business at Savannah River and Portsmouth, Fluor is an integrated subcontractor for Triad National Security, which on Thursday took over management of DOE’s Los Alamos National Laboratory in New Mexico. On Oct. 1, a Fluor subsidiary also assumed contracts from the Navy and DOE’s semiautonomous National Nuclear Security Administration to manage the National Naval Laboratory.
Although not mentioned during the call, Fluor Idaho has a five-year, $1.5 billion cleanup contract at DOE’s Idaho National Laboratory, which runs until May 2021.
Government segment revenue for the quarter was $781 million, up from $766 million a year ago. Government sector profit was $32 million, up from $30 million in the third quarter of 2017.
Earnings for 2018 should end up between $1.80 and $1.90 per diluted share, Fluor reported. That is down from the $2.10 to $2.50 range, the company had envisioned in August.
