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FLUOR CORP (FLR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 headline results were weak on core operations with revenue $3.978B (down 6% y/y) and adjusted EPS $0.43 (down 49% y/y), driven by infrastructure cost growth and arbitration in Mexico; GAAP EPS was $14.81 on a $3.2B pre‑tax NuScale mark‑to‑market gain .
  • The company cut FY2025 guidance: adjusted EBITDA to $475–$525M (from $575–$675M) and adjusted EPS to $1.95–$2.15 (from $2.25–$2.75); revenue growth outlook to ~5–10% (from ~15% in Q1), and operating cash flow to $200–$250M (from $450–$500M) .
  • Infrastructure issues (three projects; $54M net impact) and an unexpected $31M arbitration ruling at the Mexico JV pressured segment profit; new awards slowed to $1.8B while backlog remained large at $28.2B (80% reimbursable) .
  • Positive catalyst: LNG Canada shipped first cargo; JV reached a settlement covering COVID claims; JV awarded FEED update for Phase 2, which could potentially double facility size .
  • Stock reaction: shares fell ~27% to $41.42 by Aug 5 following the cut to guidance and disclosure of project issues, spurring law‑firm investigations .

What Went Well and What Went Wrong

  • What Went Well

    • LNG Canada milestone and de‑risking: “first shipment of LNG” and settlement reached for COVID claims and other matters; Phase 2 FEED award positions Fluor for follow‑on scope .
    • Strong reimbursable profile and backlog durability: backlog $28.2B, 80% reimbursable; Urban backlog up 5% y/y to $20.6B (73% of total) .
    • Capital returns and liquidity: $153M buybacks in Q2; cash and marketable securities of ~$2.3B at quarter‑end .

  • What Went Wrong

    • Infrastructure execution headwinds: $54M net impact across three projects due to subcontractor design errors, schedule impacts, and price escalation; Urban Solutions profit fell to $29M from $105M y/y .
    • Mexico JV adverse ruling and slowdown: unexpected $31M arbitration hit in Energy Solutions; curtailing work pending client payments, pressuring PGM and interest income .
    • Macro/awards softness: client hesitation amid tariff/trade uncertainty and cost escalation slowed new awards to $1.8B; management reduced FY revenue growth and OCF outlook .

Financial Results

Consolidated Results – Actuals (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$4.260 $3.982 $3.978
Adjusted EBITDA ($USD Millions)$154 $155 $96
Adjusted EPS ($USD)$0.48 $0.73 $0.43
Total Segment Profit Margin %4.8% 3.3% 2.0%
Operating Cash Flow ($USD Millions, quarterly)—($286) ($21)

Notes: Q4 2024 OCF not disclosed in the quarter; full‑year 2024 OCF was $828M .

Q2 2025 vs Prior Year and vs Estimates

MetricQ2 2024Q2 2025 ActualQ2 2025 Consensus*Surprise
Revenue ($USD Billions)$4.227 $3.978 $4.549*Miss (~$0.571B)
EPS (Adjusted) ($USD)$0.85 $0.43 $0.560*Miss ($0.130)

*Values retrieved from S&P Global.

Segment Breakdown – Q2 2025 vs Q2 2024

SegmentRevenue Q2’24 ($M)Revenue Q2’25 ($M)Segment Profit Q2’24 ($M)Segment Profit Q2’25 ($M)Margin Q2’24Margin Q2’25
Urban Solutions1,831 2,070 105 29 5.7% 1.4%
Energy Solutions1,595 1,143 75 15 4.7% 1.3%
Mission Solutions704 762 41 35 5.8% 4.6%
Other97 3 (27) (1) NM (33.3)%
Total4,227 3,978 194 78 4.6% 2.0%

Q2 2025 Key KPIs

KPIQ2 2024Q2 2025
New Awards ($USD Billions)$3.098 $1.768
Backlog ($USD Billions)$32.304 $28.205
% Reimbursable Backlog81% 80%
% Backlog Outside U.S.53% 42%
Cash & Cash Equivalents ($USD Billions)—$2.172
Share Repurchases ($USD Millions, quarter)—$153

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY 2025$575–$675M $475–$525M Lowered
Adjusted EPSFY 2025$2.25–$2.75 $1.95–$2.15 Lowered
Operating Cash FlowFY 2025$450–$500M $200–$250M Lowered
Revenue Growth vs 2024FY 2025~15% ~5%–10% Lowered
New AwardsFY 2025Book‑to‑burn >1 (qualitative) $13–$15B Now quantified
Urban Segment MarginFY 2025~4%–5% ~2.5%–3.5% Lowered
Tax Rate AssumptionFY 202530%–35% ~30% Narrowed
Share RepurchasesFY 2025Target ~$600M $450–$500M expected Lower cadence

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
AI/Data centers & SemiconductorsSigned MSA with a leading provider; in talks with top developers; power demand cited as massive . Q1: additional data center and semi opportunities .Completed colocation data centers in India; pursuing more work under MSA; near‑term clients refining capex amid power/water constraints .Structural tailwind; near‑term pacing cautious.
Supply chain, tariffs & macroTracking new administration EO; broadly pro‑investment stance . Q1: some clients need cost/clarity; continuing FEEDs .Trade/tariff uncertainty is materially impacting client FIDs; “tariff matrix” planning with clients .Uncertainty rose; elongates awards.
Infrastructure project performanceLegacy infra nearing completion (Gordie, LAX, LBJ) . Q1: Gordie 96% complete .Three projects drove $54M net impact; Gordie 97% complete; LBJ 78%; I‑35 phase 2 at 58% .Operational issues but progressing to completion.
LNG Canada~95% complete; targeting mid‑2025 first cargo; COVID claims unresolved . Q1: commissioning cargo; systems nearing RFSU .First cargo shipped; COVID claims/other matters settled; JV won Phase 2 FEED update .De‑risked; optionality for Phase 2.
Regulatory/legal & JV MexicoQ4: jury verdict provision on old infra JV . Q1: Mission claim reserve; Mexico JV reserve .$31M arbitration hit for Mexico JV; curtailment pending payments; management pursuing recoveries on infra projects .Legacy/legal items persist; potential upside on recoveries.
Capital returns & NuScaleDeconsolidation gain; monetization strategy in process .15M Class B conversion planned; market‑facing monetization path favored; will utilize tax credits; buybacks slowed .Pivot to public monetization; supports capital returns.

Management Commentary

  • CEO on LNG Canada and settlement: “We achieved RFSU on Train 1… the client shipped the first cargo of LNG… our joint venture has recently reached a settlement agreement covering our COVID claims and other matters.”
  • CEO on infrastructure issues: “Results reflect a $54 million net impact of cost growth and expected recoveries on three infrastructure projects, due to subcontractor design errors, the related schedule impacts, and price escalation.”
  • CFO on guidance reset: “We are revising our 2025 adjusted EBITDA guidance to $475 million to $525 million and our adjusted EPS guidance to $1.95 to $2.15… big factors are market hesitancy, infrastructure, and the slowdown in Mexico.”
  • CFO on buybacks: “We bought 4 million shares in the second quarter, spending $153 million… expect total repurchases to be between $450 to $500 million versus the $600 million… communicated after quarter one.”
  • CEO on trade policy: “Trade policy… is having a significant impact on client sentiment… clients need… stability and certainty… we hope that it does in the near future.”

Q&A Highlights

  • Bookings/awards cadence and tariffs: Management emphasized tariff uncertainty as a key reason for client hesitancy; expects acceleration when policy clarity improves; still pursuing mining, advanced manufacturing, data centers, power and DOE work .
  • NuScale monetization mechanics: 15M share conversion to Class A this month; tax gain largely shielded by tax credits; pivoting to a market‑facing monetization path rather than a strategic block sale at current screen prices .
  • LNG Canada Phase 2 risk profile: Expect lump‑sum elements but with improved contractual allocation based on Phase 1 learnings and design replication (~80%); confident in better contract/execution model if project proceeds .
  • CFM/PGM accounting: Q2 saw ~$13M deferral of PGM due to CFM and backlog adjustments on reimbursable work; mirror image of Q1 benefit on different projects; profit recognized later as materials land .
  • Infrastructure recoveries: Current results include probable recoveries; management sees possible recoveries “substantially larger” and will pursue equitable outcomes .

Estimates Context

  • Q2 2025: Adjusted EPS $0.43 vs consensus $0.560*; Revenue $3.978B vs consensus $4.549B* — both misses. Q1 2025: Adjusted EPS $0.73 vs $0.500*; Revenue $3.982B vs $4.177B* (EPS beat; revenue miss). Q3 2025 consensus ahead of print then showed EPS $0.68 actual vs $0.450* estimate and revenue $3.368B actual vs $4.197B* (contextual reference). Values retrieved from S&P Global.
MetricQ1 2025 ActualQ1 2025 Consensus*Q2 2025 ActualQ2 2025 Consensus*
Revenue ($USD Billions)$3.982 $4.177*$3.978 $4.549*
EPS (Adjusted) ($USD)$0.73 $0.500*$0.43 $0.560*

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core earnings pressure is transitory but real: infrastructure charges ($54M), Mexico arbitration ($31M), and slower awards cut FY EBITDA/EPS/OCF guidance; near‑term estimate risk remains on execution and awards timing .
  • LNG Canada de‑risked with first cargo and COVID settlement; Phase 2 FEED award adds medium‑term optionality; watch for Train 2 completion and any contract details on Phase 2 .
  • Backlog quality still solid (80% reimbursable), but conversion pacing hinges on tariff/trade clarity; monitor policy signals and client FIDs across mining, data centers, and power .
  • Urban margin reset to 2.5%–3.5% embeds infra headwinds; potential upside from recoveries could support H2 and 2026 margin normalization if achieved .
  • Capital returns persist albeit slower ($450–$500M buybacks vs $600M prior) and NuScale monetization shift to public markets could unlock cash/tax benefits over time .
  • Trading lens: The August drawdown (~27%) reflects guidance cuts and execution noise; catalysts ahead include infra project milestones, LNGC Train 2, awards in data centers/mining/power, and NuScale monetization steps .

Appendix: Additional Data Points

  • Q2 cash/marketable securities ~$2.3B; quarter OCF ($21)M vs $282M y/y on working capital increases, infra funding, AR timing .
  • Backlog composition Q2: Urban $20.576B; Energy $5.583B; Mission $2.046B; 42% outside U.S.; 80% reimbursable .
  • Segment context: Energy profit impacted by 2021 Mexico JV arbitration; Mission impacted by temporary stop work order in Pacific .

Citations: All data and quotations are sourced from Fluor’s Q2 2025 8‑K press release and reconciliation tables , Q2 2025 earnings call transcript , Q1 2025 8‑K and call , and Q4 2024 8‑K and call . Stock reaction references from contemporaneous press releases by law firms .