Q1 2010 Earnings Call
May 10, 2010 5:30 pm ET
David Seaton - Chief Operating Officer and Member of Compliance & Ethics Committee
Alan Boeckmann - Executive Chairman, Chief Executive Officer and Chairman of Executive Committee
D. Steuert - Chief Financial Officer, Principal Accounting Officer and Senior Vice President
Kenneth Lockwood - Vice President of Corporate Finance and Investor Relations
Andrea Wirth - Robert W. Baird & Co. Incorporated
Jamie Cook - Crédit Suisse
Alexander Rygiel - FBR Capital Markets & Co.
Chase Jacobson - Sterne Agee & Leach Inc.
Barry Bannister - Stifel, Nicolaus & Co., Inc.
Michael Dudas - Jefferies & Company, Inc.
John Rogers - D.A. Davidson & Co.
Andy Kaplowitz - Barclays Capital
Will Gabrielski - Broadpoint AmTech, Inc.
Graham Mattison - Lazard Capital Markets LLC
Scott Levine - JP Morgan Chase & Co
Steven Fisher - UBS Investment Bank
Previous Statements by FLR
» Fluor Corporation Q4 2009 Earnings Call Transcript
» Fluor Corporation Q3 2009 Earnings Call Transcript
» Fluor Corporation Q2 2009 Earnings Call Transcript
Good afternoon, and welcome to the Fluor Corporation's First Quarter 2010 Conference Call. [Operator Instructions] A replay of today's conference call will be available at approximately 8:30 p.m. Eastern time today, accessible on Fluor's website at www.fluor.com. The Web replay will be available for 30 days. A telephone replay will also be available through 8:30 p.m. Eastern time on May 16 at the following telephone number: (888) 203-1112, the passcode of 9182654 will be required. At this time, for opening remarks, I would like to turn the call over to Mr. Ken Lockwood, Vice President of Investor Relations. Please go ahead, Mr. Lockwood.
Thank you, operator. Welcome, everyone, to Fluor's First Quarter 2010 Conference Call. With us today are Alan Boeckmann, Fluor's Chairman and CEO; David Seaton, Fluor's Chief Operating Officer; and Mike Steuert, Fluor's Chief Financial Officer. Our earnings announcement was released this afternoon after the market closed. We have also posted a slide presentation on our website, which we will reference while making prepared remarks on today's call.
Before getting started, I'd like to refer you to our Safe Harbor note regarding forward-looking statements, which is summarized on Slide 2. During today's call and slide presentation, we will be making forward-looking statements, which reflect our current analysis of existing trends and information, and there is an inherent risk that actual results and experience could differ materially. You can find a discussion of those risks factors in our 10-K, which was filed on February 25, 2010.
During this call, we may discuss certain non-GAAP measures. Reconciliations of these amounts with the comparable GAAP measures are reflected in our current earnings release and are posted in the Investor Relations section of our website at investor.fluor.com. Now I'll turn the call over to Alan Boeckmann, Fluor's Chairman and CEO. Alan?
Thanks, Ken. Good afternoon, everybody, and thanks for joining us today. I'd like to review our results for the first quarter, and at the same time, provide an update on our business outlook for 2010. So let's start by looking at some of our first quarter financial highlights, and you'll see these on Slide 3.
Our net earnings attributable to Fluor for the first quarter were $137 million or $0.76 per diluted share. These results are in line with our expectation for the quarter, and as expected, reflect lower contributions from the Oil & Gas segment. Our consolidated segment profit for the quarter was $243 million, comparable with $332 million a year ago. Segment margins were 4.9% in the quarter, and this compares with 5.7% a year ago, which at the time, was very near a historical high point for the company. Revenue for the quarter was $4.9 billion, and that's down from $5.8 billion a year ago. Overall, results reflect lower revenue and profit from Oil & Gas and also from Global Services, and that's partly been offset by growth in the Power, Government and Industrial & Infrastructure segments.
Let me refer you to Slide 4. First quarter new awards of $3.4 billion were diversified and included $1.4 billion in Oil & Gas, $1 billion in Industrial & Infrastructure and about $400 million in both Government and Global Services. Backlog for the quarter ended at $25.7 billion, which was a modest decline from the $26.8 billion we reported last quarter.
So to summarize at this point, I think our end market diversification has enabled us to deliver good for profitability, despite lower new award levels in the recent quarters and the trailing impact of a significant reduction in spending by our Oil & Gas clients. Now I'd like to ask David Seaton, Fluor's Chief Operating Officer, to provide an update on the markets in each of our segments. David?
Thanks, Alan. I'll start with Oil & Gas and then work my way through the segments. Turning to Slide 5, Oil & Gas had a good quarter, with the award of the jetty boil-off project for Qatargas. This is a strategic upstream win for us and is a great example of a project that's been pending for many quarters, and has finally progressed to an award stage. It's also characteristic of the current oil and gas market, although we do see signs that other key prospects could begin to move forward.
In downstream, our ICA Fluor joint venture was awarded two clean gasoline projects for PEMEX during the quarter. We also see downstream prospects in Asia and Middle East and in South America. In the U.S., we are making good progress on the remaining of the large refinery projects we currently have in backlog.
In the petrochemicals market, orders have slowed considerably over the last year, as we expected, but we did buck an incremental award for the expansion of project in China, and we continue to view China and the Middle East as the most likely areas for future awards. However, this market is clearly between cycles and will take some time before it picks up materially.