Sign in
FC

FLUOR CORP (FLR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered strong adjusted results despite a large legal charge: adjusted EPS $0.68 (up 33% y/y) vs S&P Global consensus $0.45 — bold beat; revenue $3.37B missed consensus $4.20B due to a $653M Santos ruling recorded as a reduction to revenue . EPS estimate vs actual from S&P Global: 0.45 vs 0.68*; revenue estimate vs actual: $4.20B vs $3.37B*.
  • Guidance raised: 2025 adjusted EBITDA to $510–$540M (from $475–$525M) and adjusted EPS to $2.10–$2.25 (from $1.95–$2.15); operating cash flow guidance increased to $250–$300M .
  • Backlog stable at $28.2B with 82% reimbursable; new awards $3.3B (99% reimbursable) support forward visibility, with Energy Solutions headwinds offset by Urban and Mission momentum .
  • Capital return accelerates: $70M repurchased in Q3; targeting an additional $800M through February (total ~$1.3B over 15 months), enabled by the structured NuScale stake monetization plan and $605M proceeds through early October .

Note: Values retrieved from S&P Global*.

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA $161M (up 29% y/y) and adjusted EPS $0.68 (up 33% y/y); management emphasized “disciplined execution, a predominantly reimbursable portfolio, and a clear capital allocation strategy” .
  • Urban Solutions momentum: revenue rose to $2.3B (from $1.9B), profit $61M; new awards $1.8B with strength in life sciences/mining, backlog up 8% y/y to $20.5B .
  • Mission Solutions strength: new awards $1.3B including a six-year DOE Portsmouth extension (~$1.1B), with segment profit of $34M and favorable claim resolution on a completed weapons project .

What Went Wrong

  • Santos ruling impact: $653M recorded as a revenue reversal in Energy Solutions, driving segment loss of $533M and consolidated segment loss of $439M; GAAP net loss attributable to Fluor was $697M .
  • NuScale mark-to-market loss: $401M equity method loss and related tax complexities (e.g., valuation allowance release) weighed on GAAP results .
  • Infrastructure headwinds: Urban Solutions reflected a $25M delay-related adjustment and G&A rose to $43M (+16% y/y) including $12M restructuring; Energy Solutions new awards fell to $222M, backlog declined y/y to $5.1B .

Financial Results

Quarterly Results (Q1 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$3.982 $3.978 $3.368
Adjusted EPS ($)$0.73 $0.43 $0.68
GAAP EPS ($)($1.42) $14.81 ($4.30)
Adjusted EBITDA ($USD Millions)$155 $96 $161
Total Segment Profit ($USD Millions)$131 $78 ($439)
New Awards ($USD Billions)$5.811 $1.768 $3.253
Backlog ($USD Billions)$28.718 $28.205 $28.236
Operating Cash Flow ($USD Millions)($286) ($21) $286

Segment Breakdown – Q3 2025 vs Q3 2024

SegmentQ3 2024 Revenue ($MM)Q3 2025 Revenue ($MM)Q3 2024 Profit ($MM)Q3 2025 Profit ($MM)Q3 2024 Margin (%)Q3 2025 Margin (%)
Urban Solutions$1,931 $2,343 $68 $61 3.5% 2.6%
Energy Solutions$1,428 $262 $50 ($533) 3.5% NM
Mission Solutions$635 $761 $45 $34 7.1% 4.5%
Other$100 $2 ($46) ($1) NM NM
Total$4,094 $3,368 $117 ($439) 2.9% (13.0%)

KPIs

KPIQ1 2025Q2 2025Q3 2025
Backlog reimbursable (%)79% 80% 82%
Backlog outside U.S. (%)42% 42% 41%
New awards outside U.S. (%)10% 50% 30%
Cash & equivalents ($B)$2.43 $2.17 $2.78

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY 2025$475–$525M (Aug 1) $510–$540M (Nov 7) Raised
Adjusted EPSFY 2025$1.95–$2.15 (Aug 1) $2.10–$2.25 (Nov 7) Raised
Operating Cash FlowFY 2025$200–$250M (Aug 1) $250–$300M (Nov 7) Raised
Tax Rate AssumptionFY 202530% (Aug 1) 30% (Nov 7) Maintained
Segment Margin Targets (ex Santos)CY 2025Urban ~2.5–3.5% (Q2 call) Urban ~2.5%; Energy ~6%; Mission ~4.5% (Q3 call) Updated detail
New Awards OutlookFY 2025$13–$15B (Q2 call) ~$13B (Q3 call) Lowered
Share RepurchasesDec’24–Feb’26$450–$500M in 2025 (Q2 call) Targeting +$800M through Feb; ~$1.3B over 15 months (Q3 call) Increased pace

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
NuScale monetizationPivot to market-facing solution; planned conversion of 15M Class B shares; tax shielding expected Agreement to convert remaining stake; structured monetization; $605M proceeds through early Oct; completion targeted by Q2 2026 Progressing
LNG CanadaQ1: Ready-for-startup milestones approaching Train 2 achieved RFSU; punch list focus; Phase 2 FEED update underway Nearing completion
Infrastructure legacyQ1 reserve on Mission Solutions claim ; Q2 cost growth on three projects $25M delay-related adjustment; partial offset from favorable negotiation on completed project Mixed cleanup
Mexico JV cash collectionsQ2 slowdown pending AR; unexpected arbitration ruling JV-level collections ~$800M in Q3 and ~$300M in Oct; controlled ramp-up Improving
Trade policy & awards timingQ2: client hesitancy amid tariffs/interest rates; awards timing pushed Backlog flat at ~$28B; awards weighted to 2H26; EBIT shift ~four quarters Deferred
Energy Solutions marginsQ1 ES margin 3.9% ; Q2 ES margin 1.3% Guidance ~6% ES margin excluding Santos effect Normalizing ex Santos
Capital returnsQ1 targeted $600M for 2025 ; Q2 slowed cadence Targeting +$800M by Feb; ~$1.3B total 15 months Accelerating

Management Commentary

  • “Despite continued short term uncertainty in some markets, we are well positioned with unmatched global engineering and construction expertise, disciplined execution, a predominantly reimbursable portfolio, and a clear capital allocation strategy.” — CEO Jim Breuer .
  • “Based on the results from this quarter, we are increasing our 2025 adjusted EBITDA guidance to $510–$540 million and our adjusted EPS guidance to $2.10–$2.25.” — CFO John Regan .
  • On Santos: “The $653 million charge… because it’s customer-related, was recorded as a reduction to revenue… we expect to send payment to Santos to enable the appeal process… negotiating with carriers to support the appeal and costs.” — CFO John Regan .
  • On NuScale: “Our monetization plan ensures we can… deliver significant value… while also considering NuScale’s own capital-raising needs.” — CEO Jim Breuer ; “Monetization should begin… under a structured program to get the best NPV.” — CFO John Regan .

Q&A Highlights

  • 2026 outlook: Management expects EBITDA “marginally better than 2025,” with Urban growth (metals/mining) and ES tailwinds from Mexico resumption; legacy projects burden easing .
  • ES margins excluding Santos: Handovers and reserve reductions support normalized margins; CFO to “coalesce” around a figure, guided ~6% for CY25 .
  • Santos funding: ~$600M expected funded from core operating cash — not NuScale proceeds; insurance tower contributions likely to improve .
  • Data centers & power: Focus on large, complex hyperscaler campuses via strategic relationships; accelerated U.S. gas-fired power outreach; nuclear prospects evolving with technology partners .
  • Backlog adjustments: Explanation of CFM-driven accounting effects leading to deferral of PGM in Q2; transparency on variable consideration changes .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Estimate vs Actual ($USD Billions)$4.177 vs $3.982* $4.549 vs $3.978* $4.197 vs $3.368*
Primary EPS Estimate vs Actual ($)$0.50 vs $0.73* $0.56 vs $0.43* $0.45 vs $0.68*
  • Q3: Bold EPS beat; revenue miss driven by the Santos $653M reversal, with adjusted EBITDA $161M above consensus EBITDA $129.5M implied on adjusted basis (S&P’s “EBITDA” actual reflects GAAP EBITDA at -$469M due to the charge) .
    Note: Values retrieved from S&P Global*.

Key Takeaways for Investors

  • The quarter’s headline GAAP loss masks robust adjusted performance and raised guidance; the Santos charge is the principal driver of the reported shortfall, recorded directly against revenue .
  • Urban and Mission segments provide near-term support: Urban revenue and awards surged; Mission won a six-year DOE Portsmouth extension and other federal work, underpinning stability .
  • Energy Solutions headwinds are ebbing: Mexico JV collections ($800M in Q3, $300M in Oct) enable controlled ramp-up; ES margins guided ~6% ex Santos for CY25 .
  • Capital return is a tangible catalyst: $800M targeted repurchases through February (total ~$1.3B over 15 months), supported by NuScale monetization program .
  • Backlog quality is high (82% reimbursable) and stable (~$28.2B); new awards and backlog adjustments indicate continued conversion, albeit with award timing skewing into 2H 2026 .
  • Watch upcoming Santos payment and insurance tower resolution; management expects carrier contributions to improve versus initial commitments .
  • The narrative into 2026: award timing deferrals shift EBIT by ~four quarters, but management sees medium-term acceleration in Urban (metals/mining, life sciences) and power (gas, nuclear), plus potential LNG Canada Phase 2 .

Additional Data and Disclosures

  • Q3 operating cash flow was $286M; full-year OCF guidance raised to $250–$300M .
  • Backlog by segment at Sept 30, 2025: Urban $20.5B; Energy $5.1B; Mission $2.6B; Total $28.2B (82% reimbursable) .
  • NuScale agreement details: conversion of remaining stake to Class A shares; structured monetization; completion targeted by end of Q2 2026 .

Disclaimer: Values retrieved from S&P Global* and company filings/transcripts as cited above.