Fluor Q1 Earnings Call Highlights

Key Points

• Fluor’s pipeline is expanding, with management saying it is executing front-end work tied to more than $60 billion of potential backlog and tracking another $40 billion in prospects over the next three years. The company said its prospect pipeline is up 50% over the past 12 months.
• Quarterly results were weighed down by one-time issues, including a $37 million mining project charge and a $96 million legal impact tied to a long-running Afghanistan lawsuit. Despite that, backlog edged up to $25.7 billion and new awards totaled $2.7 billion.
• Fluor narrowed full-year guidance for adjusted EBITDA to $525 million-$560 million, citing the mining charge, while warning that Middle East conflict could disrupt supply chains, inflation, and client spending if tensions persist. The company also said it expects about $1.4 billion in share buybacks in 2026.

Fluor NYSE: FLR reported first-quarter 2026 results that management said reflected a growing pipeline of potential work but also included several discrete items, including a legal charge tied to past government services work and a cost increase on a mining project in the Americas.

Chief Executive Officer Jim Breuer said the company is seeing “a strong trajectory” in its prospect pipeline and remains focused on pursuing large and complex engineering, procurement and construction projects where it can engage early in the planning phase and remain involved through execution.

Breuer said Fluor is currently executing front-end work that represents more than $60 billion of potential backlog if clients decide to move forward with the company. He also said Fluor is tracking an additional $40 billion in prospects over the next three years, with the overall prospect pipeline up 50% over the past 12 months.

“Growth alone is not the objective,” Breuer said. “We are prioritizing backlog quality that aligns with our strategic priorities and with our strengths.”

New Awards and Backlog

Fluor reported consolidated new awards of $2.7 billion in the quarter, 98% of which were reimbursable. Breuer said larger new award bookings are expected to be weighted toward the second half of 2026. He added that margins on first-quarter new awards were 200 basis points higher than the margin represented in the company’s current backlog.

Backlog rose slightly from year-end to $25.7 billion and was 82% reimbursable. Breuer said the backlog also reflected $1.1 billion in positive project adjustments on current work.

Among recent front-end awards highlighted by management were the Centrus nuclear fuels enrichment project, a small modular reactor project for Dow with X-energy, the America First Refinery, the Donlin Gold project, the TeraWulf data center project and Anglo American’s Woodsmith Fertilizer project.

In response to an analyst question, Breuer said Fluor remains confident that 2026 awards will be higher than 2025 awards. He said about 85% of expected new award revenue is tied to projects the company is already working on.

Segment Performance Mixed

Urban Solutions reported segment profit of $6 million, which included a $37 million impact from a mining project in the Americas that experienced declining field productivity. Breuer said the project is significantly advanced in construction and nearing 80% complete in the field, with completion targeted around the end of the year.

Breuer said the mining and metals portfolio is “overwhelmingly reimbursable” and that the affected lump-sum project represents about 5% of Fluor’s mining and metals backlog. He said the rest of that portfolio is performing above as-sold targets.

Urban Solutions new awards were $2.1 billion, compared with $5.3 billion a year earlier, when the company received a multi-billion-dollar life sciences award. First-quarter awards included a metals project in the Middle East, incremental work for a pharmaceutical facility and an infrastructure expansion at a mining facility in Chile. Urban Solutions ended the quarter with $19 billion in backlog, representing 74% of Fluor’s total backlog.

Energy Solutions segment profit rose to $74 million from $47 million a year earlier, primarily due to favorable closeout items on three projects. New awards totaled $213 million and included front-end engineering and design work for the America First Refinery in Brownsville, Texas, as well as front-end engineering and execution planning for the X-energy small modular reactor project at Dow’s Seadrift, Texas, plant.

Mission Solutions reported a segment loss of $71 million, compared with a $5 million profit a year earlier. Breuer said the results reflected a court ruling related to a lawsuit filed in 2013 involving LOGCAP activities in Afghanistan. Fluor prevailed on three of four claims, but the final jury award on the fourth claim increased to $96 million after treble damages and legal fees. The company expects to appeal. Mission Solutions new awards were $332 million, and ending backlog was $2.5 billion.

Guidance Narrowed as Company Flags Middle East Risk

Chief Financial Officer John Regan said first-quarter consolidated segment profit was $8 million. Adjusted EBITDA was $60 million, down from $155 million a year earlier, and adjusted earnings per share were $0.14, compared with $0.73 in 2025.

Regan said GAAP results included several discrete items: the $96 million LOGCAP legal impact, the $37 million mining project charge, a $124 million gain on the sale of Fluor’s fabrication yard in China and a $16 million foreign exchange gain related to a stronger U.S. dollar.

The company narrowed its full-year 2026 adjusted EBITDA guidance to $525 million to $560 million, from a prior range of $525 million to $585 million. Regan said the reduction to the high end reflected the mining charge, while the rest of the business continues to deliver at or above expectations.

Fluor expects adjusted EPS of $2.60 to $2.80, based on its expected share repurchase pace. The company maintained its operating cash flow expectation of $300 million, excluding an April tax payment related to NuScale.

Regan said the Middle East conflict “looms as a potential disruptor” to Fluor’s trajectory, including possible supply chain delays, inflation, higher interest rates and client capital spending effects if there is no resolution by the end of the second quarter. He said the company would update guidance if impacts persist into the third quarter.

Cash, NuScale Proceeds and Buybacks

Fluor ended the quarter with $3.2 billion in cash and equivalents, up $1 billion from year-end. Regan said the increase was largely driven by proceeds from the sale of 71 million NuScale shares during the quarter. After quarter-end, Fluor sold its remaining 40 million shares, generating an additional $473 million.

Regan said the NuScale sell-down generated more than $2.4 billion since September 2025 and more than $2 billion after tax. He said it delivered a multiple on invested capital of about 4.5 times and an internal rate of return of 15% since Fluor’s initial investment in 2011.

Operating cash flow was $110 million in the quarter, compared with an outflow of $286 million a year earlier. Regan said the improvement reflected lower working capital on several projects and distributions from large joint ventures in Energy and Mission.

Fluor repurchased 11 million shares in the quarter, deploying more than $500 million. Regan said the company expects to spend about $1.4 billion on share repurchases in 2026, consistent with its capital return framework.

Market Opportunities

Breuer said Fluor continues to see opportunities across critical minerals, life sciences, liquefied natural gas, nuclear, refining and power markets. He pointed to copper opportunities in South America, LNG demand, gas-fueled power generation and demand tied to data centers and advanced manufacturing.

On data centers, Breuer said Fluor signed a limited notice to proceed with TeraWulf for master planning and preconstruction services for a large-scale data center campus in Kentucky with access to 480 megawatts of grid-connected power. However, he said contract and commercial terms in the data center market remain challenging, particularly around risk allocation.

Breuer also said Fluor is monitoring potential opportunities in the Middle East and Venezuela. In the Middle East, he said Fluor’s workforce is safe and activities have continued without interruption. In Venezuela, he said the company is in active discussions with clients and local partners, though timing will depend on when clients gain confidence in the business environment.

About Fluor NYSE: FLR

Fluor Corporation NYSE: FLR is a global engineering and construction firm that provides integrated solutions across the energy, chemicals, mining, clean energy, infrastructure and government services markets. The company's core offerings include engineering, procurement, fabrication, construction, maintenance and project management services, with capabilities spanning feasibility studies, detailed design and turnkey delivery. Fluor's diversified portfolio encompasses conventional oil and gas facilities, liquefied natural gas (LNG) plants, petrochemical facilities, power generation projects, transportation infrastructure and federal government programs.

Founded in 1912 by John Simon Fluor as the Fluor Construction Company in Pomona, California, the firm has grown into an industry leader headquartered in Irving, Texas.

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