By admin 
Project delays and cancellations weighed on Fluor’s third quarter results, though CEO David Constable emphasized strong demand for data centers and nuclear energy, even as the firm’s new awards plummeted from a year ago.
The data center market, particularly in North America, remains a primary focus as tech companies accelerate capital expenditures for hyperscale and colocation facilities, said Constable during the call.
Due to that growth, Fluor developed an offsite modularization design and production process that should expedite the build out of these projects. That should allow the company to effectively meet the tight schedules typical in data center construction, according to the firm.
“In the data center market, we continue to engage with large tech companies and expect growth in the first half of 2025,” said Constable. “The company is working on several competitive advantages for data center execution … [such as] developing innovative cooling process concepts.”
The Irving, Texas-based company also expects nuclear projects to play a larger role in its energy solutions segment. The recent U.S. election should also help reduce some of the hesitation that impacted project timelines, said Constable.
“We are pleased the election process delivered a clear winner,” said Constable. “This creates an environment of certainty that our clients need in order to make major capital investment decisions.”
David Constable
Courtesy of Fluor
Fluor’s nuclear portfolio includes small modular reactors and traditional reactors. Constable added the firm is positioned to provide carbon-free power solutions to meet rising demands from data centers and other sectors.
“There’s a strong appetite for nuclear energy to meet incredible demand for power globally, interest has never been greater,” said Constable. “We’re very excited about the opportunities for Fluor and for small modular reactor shareholders.”
Takeaways from earnings
Fluor reported it earned $54 million in the third quarter of 2024, a notable drop compared to a $206 million profit a year ago. Its revenue hit $4.09 billion, about a 3.3% gain from $3.96 billion in last year’s third quarter.
The company’s backlog jumped to $31.32 billion in the third quarter, around a 20.4% increase from last year’s third quarter. However, new awards in the third quarter totaled $2.7 billion, a 46% drop from the $5 billion in new awards in the third quarter of 2023, according to the earnings report.
Setbacks in its energy segment largely caused that drop in profit.
Project cancellations and delayed timing on certain large energy projects impacted the firm’s revenue results, said CFO Joe Brennan during the call. He added “the contributions from [those projects] will be generated, but it’s been pushed.” A significant portion of Fluor’s energy revenue, originally expected in 2024, will now shift into 2025 due to these project timing issues.
Constable added chip manufacturer Intel recently canceled work on a large manufacturing facility project. Overall, the earnings report fell short, said Andrew Wittmann, senior research analyst at Baird, a Milwaukee-based financial services company.
“The third quarter of 2024 was not a good print with financial metrics missing expectations and soft awards,” said Wittmann in a research note. “Fluor had a charge in its energy segment and project cancellations. It pointed to delayed timing of new projects. We suspect Fluor’s macro hasn’t really changed, but the execution wasn’t great.”