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Fluor Beats Analysts' Expectations in Quarter

November 20, 1998|From Reuters

Fluor Corp., one of the world's largest engineering companies, posted earnings that beat Wall Street expectations, largely due to cost-cutting measures and higher selectivity of projects.

In its fiscal fourth quarter ended Oct. 31, Irvine-based Fluor reported earnings of $63.8 million, or 84 cents a share, compared with $88 million, $1.06 a share, a year ago on revenues of $3.3 billion and $4 billion respectively. Analysts polled by First Call Corp. expected Fluor to earn 82 cents a share for the quarter.

Results for the 1997 fourth quarter included a $7-million pretax gain from the sale of its electronic purchasing unit, though that gain was partly offset by a $4.5-million cost-reduction charge.

Fluor Daniel, designer and builder of power plants and oil refineries that generates about 90% of Fluor's revenue, had operating profit of $66 million for the quarter, down from $87 million a year earlier.

Fluor noted it is cautious about the near-term outlook for new projects and said it is prepared to take cost-cutting measures in the event of a potential slowdown. It said it does expect the unit to achieve earnings growth in its fiscal 1999.

In New York Stock Exchange trading, Fluor shares fell 38 cents to close at $43.13.

The company's coal-mining unit, A.T. Massey Coal, one of the top five operations in the country, also reported higher operating profit for the quarter and the year, and Fluor sees continued earnings growth for the unit in 1999.

The pace of new awards slowed to $1.9 million for the quarter and $10 billion for the year compared to $2.7 billion and $12.1 billion respectively in 1997 due to both deferred client decisions and the company's higher selectivity process for new work.

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