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Fluor Falls on Restated 2019 Earnings, Pulled 2020 Guidance

Fluor falls after restating its 2019 earnings and pulling its previously issued 2020 guidance following an internal accounting review sparked by an SEC probe.

Shares of Fluor  (FLR) - Get Free Report dropped on Friday after the oil- and gas-focused construction and engineering company restated its 2019 earnings and pulled previously issued guidance for 2020 following an internal accounting review sparked by a Securities and Exchange Commission probe.

Shares of Fluor were down 10.52% at $8.38 after the Irving, Texas-based company revealed updated full-year 2019 results that showed a net loss from continuing operations of $1.7 billion, or $11.97 a diluted share, compared to earnings from continuing operations of $9 million, or 7 cents share, for 2018.

The restated 2019 results followed a mid-February SEC probe into the company’s finances. At the time, Fluor disclosed that the SEC had asked for documents and information related to projects that the company recorded charges for in the second quarter of 2019.

An internal review of the company’s previously issued financial information determined “material project-related errors resulting from the absence of timely recognition of changes in forecasted project costs, and from other errors” in project revenue estimates, Fluor said in a statement accompanying the reissued results on Friday.

The revised 2019 loss includes impairment, restructuring and other exit costs of $533 million, expenses of $138 million related to the settlement of its U.K. pension plan, and $731 million related to establishing valuation allowances to reduce net deferred tax assets.

The company’s consolidated segment loss for the year was $386 million compared to a profit of $323 million in 2018. Revenue from continuing operations was $14.3 billion in 2019 vs. $15.2 billion in the prior year. Fluor said the 2019 adjustments reduced cumulative pretax earnings reported through last September by $3.8 million.

Fluor also suspended its 2020 guidance, due to “… volatility in commodity prices and the global disruption from the Covid-19 pandemic, though said its updated cash balance as of August 2020 was $2.1 billion, where it expects it to remain through the end of the year.

Fluor said it expects to file its first-quarter 2020 results within the next month, followed approximately four weeks later by second-quarter results with third-quarter results approximately four weeks after that.