Canaccord Genuity Morning Coffee on Fluor (FLR): Just Go With The...
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Price: $52.42 +0.50%
Rating Summary:
13 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
13 Buy, 18 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Morning Coffee on Fluor (NYSE: FLR): Just go with the...
Fluor reported its Q4 results with earnings coming in at $0.90 per share on revenue of $6.3 billion versus consensus of $0.82 on $6.4 billion and Canaccord Genuity Infrastructure Analyst Yuri Lynk’s forecast of $0.82 on $6.4 billion. Lynk notes that the bottom line beat was mostly attributable to lower interest expense and a tax rate of 26% versus his 30% estimate. Industrial & Infrastructure segment margin was strong at 4.5% and management appeared more confident that this is a sustainable level due to multiple mining programs underway. Fluor booked new awards of $4.3 billion in Q4/11 and had a bookto-bill rati of 0.7. At the end of the quarter, backlog stood at $39 billion. Major contracts awarded in quarter include $2.5 billion in Oil & Gas (O&G) awards, including Syncrude Mildred Lake and more West Qurna work; and $947 million in Power awards, including the LCRA 540 MW gas-fired combined-cycle power plant in Texas, and the 125 MW solar photovoltaic facility in Arizona. Lynk believes Fluor’s ability to execute on extremely large, challenging projects on a global basis positions the company well to take advantage of the large slate of mega projects planned in the years ahead. He remains bullish on the name due to: 1) Visibility – strong backlog of $39 billion (+13% year-over-year) with a deep prospect list in Mining, O&G, and, increasingly, Power; 2) O&G still to kick in – he expects O&G backlog to ramp in 2012 as Upstream front end engineering and design transition into engineering, procurement and construction opportunities and Downstream front end engineering and design opportunities improve; and 3) Fluor’s attractive valuation.
Fluor reported its Q4 results with earnings coming in at $0.90 per share on revenue of $6.3 billion versus consensus of $0.82 on $6.4 billion and Canaccord Genuity Infrastructure Analyst Yuri Lynk’s forecast of $0.82 on $6.4 billion. Lynk notes that the bottom line beat was mostly attributable to lower interest expense and a tax rate of 26% versus his 30% estimate. Industrial & Infrastructure segment margin was strong at 4.5% and management appeared more confident that this is a sustainable level due to multiple mining programs underway. Fluor booked new awards of $4.3 billion in Q4/11 and had a bookto-bill rati of 0.7. At the end of the quarter, backlog stood at $39 billion. Major contracts awarded in quarter include $2.5 billion in Oil & Gas (O&G) awards, including Syncrude Mildred Lake and more West Qurna work; and $947 million in Power awards, including the LCRA 540 MW gas-fired combined-cycle power plant in Texas, and the 125 MW solar photovoltaic facility in Arizona. Lynk believes Fluor’s ability to execute on extremely large, challenging projects on a global basis positions the company well to take advantage of the large slate of mega projects planned in the years ahead. He remains bullish on the name due to: 1) Visibility – strong backlog of $39 billion (+13% year-over-year) with a deep prospect list in Mining, O&G, and, increasingly, Power; 2) O&G still to kick in – he expects O&G backlog to ramp in 2012 as Upstream front end engineering and design transition into engineering, procurement and construction opportunities and Downstream front end engineering and design opportunities improve; and 3) Fluor’s attractive valuation.
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