FLUOR (FLR)·Q4 2025 Earnings Summary

Fluor Stock Jumps 4% Despite Miss as NuScale Windfall and Strong 2026 Outlook Offset Santos Pain

February 17, 2026 · by Fintool AI Agent

Fluor Corporation (NYSE: FLR) reported Q4 2025 results that missed analyst expectations, with full-year adjusted EPS of $2.19 falling 16% below consensus due to the lingering impact of an adverse $643 million Santos ruling . However, the stock rose approximately 4% in after-hours trading as investors focused on better-than-expected 2026 guidance, aggressive capital returns, and a $1.35 billion NuScale monetization windfall received in early 2026 .

Did Fluor Beat Earnings?

No — Fluor missed on both revenue and earnings. The miss was driven primarily by the Santos ruling impact on the Energy Solutions segment.

Q4 2025 specifically showed weakness, with revenue of $4.175 billion (-2% YoY) and adjusted EBITDA of $91 million versus $154 million in the prior year .

*Values retrieved from S&P Global for consensus estimates.

What Did Management Guide?

2026 EBITDA guidance came in above consensus — the key driver of the positive stock reaction.

2026 Segment Margin Guidance:

Management expects adjusted EPS of $2.60-$3.00 assuming full completion of the $1.4B share repurchase program at $45/share .

*Consensus retrieved from S&P Global.

CEO Jim Breuer expressed confidence in the outlook:

"Our growing confidence in capturing significant EPC awards in 2026 and into 2027 is supported by an improving capital spending environment and increasing client commitments."

CFO John Regan highlighted capital allocation priorities:

"With the continued monetization of our NuScale investment, we have enhanced financial flexibility to drive organic growth, M&A opportunities that advance our strategic objectives, and continued repurchases."

How Did the Stock React?

Despite the earnings miss, FLR stock rose approximately 4.4% in after-hours trading to $47.66 from a previous close of $45.67.

Why the positive reaction despite the miss?

1. 2026 EBITDA guidance 10-22% above consensus signals management confidence in award momentum
2. $1.35 billion NuScale proceeds received in Q1 2026, with full monetization expected by Q2 2026
3. $1.4 billion share repurchase plan for 2026 (after $754M in 2025)
4. Santos pain is backward-looking — the $643M impact is a one-time issue from a project completed in 2015

Management noted that 70%+ of 2026 EBITDA guidance is already supported by backlog, with the remainder expected to come from "book and burn" activity based on the quality and maturity of current prospects .

What Changed From Last Quarter?

Key changes:

• Q4 sequential improvement in revenue and segment profitability
• New awards dropped sharply ($1.1B vs $4.9B in Q3), reflecting timing delays rather than demand weakness
• Backlog composition improved to 81% reimbursable (lower risk)

Segment Performance

Urban Solutions — The Growth Engine

Urban Solutions delivered another strong year with revenue of $9.2 billion (+27% YoY), marking the third consecutive year of new awards in the $9 billion range . Backlog reached $18.7 billion, up from $17.7 billion.

Margin compression reflects $108 million in cost growth on legacy infrastructure projects .

Energy Solutions — Santos Drag

The Energy Solutions segment reported a $414 million loss for FY 2025 versus $256 million profit in FY 2024 . This was driven entirely by the $643 million reversal of previously recognized revenue from the Santos project in Australia .

Management noted that 2025 awards were "primarily related to higher margin engineering services work that will enable larger EPC awards in the next two years" .

Key 2025 Project Completions: LNG Canada Phase 1, TCO (Kazakhstan), and BASF's largest investment in China — the latter delivered with 75+ million work hours and zero lost time injuries .

Mission Solutions — Steady but Pressured

Mission Solutions delivered $94 million profit on $2.7 billion revenue, with results impacted by reserves on a DOD project plus a legacy legal ruling totaling $60 million .

Capital Allocation

Fluor is returning substantial capital to shareholders while maintaining financial flexibility:

NuScale Monetization Progress: Fluor received $605 million from NuScale share sales in 2025 and an additional $1.35 billion in Q1 2026 from the sale of 71 million NuScale shares via a variable forward sale agreement . Management anticipates full monetization by end of Q2 2026 .

Adjusted Balance Sheet (as of Feb 13, 2026): After accounting for NuScale proceeds and share repurchases:

Cash Flow and Balance Sheet

Operating cash flow was negative $387 million in 2025 versus positive $828 million in 2024 . This included a $642 million payment to Santos (net of insurance recoveries) .

Liquidity remains strong at $2.2 billion in cash and marketable securities, with G&A down 3% YoY .

2026 Cash Flow Considerations:

• Operating cash flow guidance of ~$300M excludes $400M+ tax bill for NuScale gains (due Q2)
• Loss project funding expected to be ~$220M, including ~$90M in operating cash flow
• JV distributions from LNG Canada expected to decline ~$60M as project winds down
• Santos appeal slated for mid-2026; management sees "no material downside to pursuing it"

Q&A Highlights

On power market opportunity (Jamie Cook, Truist):

CEO Jim Breuer highlighted the transformation in utility contract negotiations:

"The power market in the U.S. has evolved significantly in the last few years, driven by the huge demand for power... In our conversations with primarily utilities, they recognize that, and the conversation is very different now. It's starting reimbursable, working together on the execution plan and the estimate, and then converting to lump sum."

Management sees the gas-fired power market as a near-term growth engine, with potential for "multiple projects by 2027" and a program-style relationship with the confidential utility client across three sites .

On 2026 guidance confidence (Steven Fisher, UBS):

CFO John Regan explained the guidance uplift: "Two-thirds to three-quarters [of EBITDA guidance] is coming from backlog, and the rest is kind of a comfortable book-to-burn for us based on historical trends. The slightly uplifted guide is based on some of the confidence... and in part due to some better execution. We forget that so much of the portfolio continues to execute at greater than as sold."

On Urban Solutions margin outlook (Sangeeta Jain, KeyBanc):

The 3-4% margin guidance for 2026 reflects the final stages of legacy project drag: "We do have the legacy projects that are scheduled for handover. So it's pushing the finality of those out the door with maybe a little bit longer of an horizon than we had expected."

On backlog conversion (Andy Kaplowitz, Citi):

Management expects 50-60% of backlog to convert to revenue in 2026, with the wide range driven by execution timing and client-furnished materials .

Key Risks and Concerns

1. Legacy Project Overruns: Cost growth on legacy infrastructure projects totaled $108 million in Urban Solutions and $30 million in Q4 alone
2. New Award Timing: 2025 new awards of $12.0 billion were below 2024's $15.1 billion, reflecting delayed Energy Solutions and Mission Solutions awards
3. Backlog Erosion: Total backlog declined to $25.5 billion from $28.5 billion, with international mix falling to 40% from 55%
4. NuScale Volatility: Q4 included a $2 billion reduction in NuScale valuation, causing a GAAP loss of $1.6 billion

Forward Catalysts

Near-Term (2026):

1. Gas-Fired Power Program: LNTP signed with confidential U.S. utility for large-scale project, with potential for two additional facilities. Projects start reimbursable then convert to negotiated fixed price in late 2026/early 2027
2. Centrus Nuclear Fuel Award: Early engineering award recognized in Q1; meaningful EPC awards expected in H2 2026 and 2027 for uranium enrichment plant expansion
3. Data Center Progress: Advanced discussions for major U.S. data center and pursuing PM work on European data center project
4. NuScale Exit: Full monetization expected by Q2 2026 with MOIC of 3.5x+ and IRR of 13%+ since 2011 investment
5. Share Repurchases: $1.4 billion planned across all four quarters of 2026 (~19% of market cap), including $400M already deployed in January-February

Medium-Term (2027+):

1. Chernovota Nuclear: Front-end planning with JV partners to finalize EPC estimate by end of 2026; could result in multi-billion-dollar award in 2027
2. LNG Canada Phase 2: Supporting client's decision process following successful Phase 1 completion
3. Mining & Metals Pipeline: Large copper, aluminum, and green steel projects plus rare earth production facilities
4. AI-Enabled "Project of the Future": Fluor is evolving its delivery platform with AI to deliver shorter schedules and greater cost competitiveness. The company began its AI journey in 2018 with predictive analytics from 200+ EPC projects, now deployed across the project lifecycle and functional roles (HR, finance, legal, procurement)

Historical EPS Beat/Miss Track Record

*EPS figures represent adjusted/normalized EPS. Data retrieved from S&P Global.

Fluor has a mixed beat/miss record with 4 beats and 5 misses over the past 9 quarters, though recent misses have been driven by specific project issues rather than systemic demand weakness.

The Bottom Line

Fluor's Q4 2025 results were messy but the story is improving. The Santos ruling created a one-time $643M headwind that overshadowed otherwise solid execution in Urban Solutions. More importantly:

• 2026 guidance is above consensus — management sees acceleration ahead
• NuScale monetization is nearly complete — $2B in proceeds with minimal remaining exposure
• Capital returns are aggressive — $1.4B buyback = ~19% of market cap
• Backlog quality is improving — 81% reimbursable reduces risk

Management reaffirmed confidence in the 2028 strategic objectives laid out at Investor Day, noting a "four-quarter slide" due to 2025 events but no change to the longer-term targets .

The market's positive after-hours reaction suggests investors are looking past the backward-looking Santos pain toward better execution ahead. The key risk remains whether Energy Solutions can convert engineering work into larger EPC contracts in 2026-2027.

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View Fluor company page | Read Q4 2025 Transcript | Prior Quarter: Q3 2025