Rating Change #4
Fluor Corporation (FLR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- FLR's revenue growth has slightly outpaced the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 14.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Construction & Engineering industry average. The net income increased by 7.5% when compared to the same quarter one year prior, going from $154.88 million to $166.46 million.
- Net operating cash flow has significantly increased by 53.85% to -$21.72 million when compared to the same quarter last year. In addition, FLUOR CORP has also vastly surpassed the industry average cash flow growth rate of -234.71%.
- FLUOR CORP has improved earnings per share by 12.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FLUOR CORP reported lower earnings of $2.69 versus $3.40 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $2.69).
- FLR's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
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