The significant decrease in Fluor Corporation's share price by around 14% occurred today.
Proven engineering and business entity Fluor (FLR dropping 0.24%) unfortunately failed to delight its investors last Friday. That morning, the company revealed its recent quarterly figures, which left the market feeling less than thrilled. Consequently, Fluor's share value plummeted by approximately 14%, while the benchmark S&P 500 index basked in a 0.3% surge.
Underwhelming third-quarter figures
Fluor's Chief Financial Officer spilled the beans, revealing that the company's third-quarter income hovered around $4.09 billion. This figure barely inched above the $3.96 billion earned during the same period in 2023. Among its four business sectors, the top performer -- urban solutions -- experienced a 35% surge, raking in $1.93 billion, while the number two contender, energy solutions, slipped 8% to contribute $1.43 billion.
Analysts following the stock had hoped for better results, with a collective expectation of $4.7 billion in quarterly revenue for Fluor.
The performance and prognostications by analysts diverged greatly when it came to net income. Fluor's net income plunged in Q3, settling at $89 million ($0.51 per share), contrasting the year-ago period's earnings of $177 million. The consensus view among analysts was a forecast of $0.77 per share.
Management attributed a portion of the decline to project delays and cancellations. Nonetheless, CEO David Constable emphasized that this situation would not divert their focus from uncovering growth opportunities in their respective markets and monetizing their earnings back to shareholders.
Adjusted net income guidance adjusted
In the earnings announcement, Fluor narrowed its anticipated full-year 2024 adjusted net income. The company now estimates this figure to fall between $2.55 to $2.75 per share, down from the previous $2.50 to $3.00 forecast. The upper limit of the revised range falls notably short of the average analyst estimate of $2.88 per share.
Fluor's stagnant top-line growth and significant net income decrease are source for concern. To regain investor trust, the company will need to swiftly demonstrate an improvement in performance. As of yet, there's little evidence of a speedy turnaround, making it wise to steer clear of the stock for the time being.
Investors may need to reconsider their approach to financing their investments in Fluor, given the company's underperformance and the revised adjusted net income guidance. The stagnant top-line growth and significant net income decrease could negatively impact the return on investment.
In light of Fluor's financial struggles and the reduced expected adjusted net income, individuals considering investing in the company's shares may want to explore alternative finance opportunities with more promising return potential.
