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Weak Outlook Flattens Fluor

The stock slumps 8% in late trading.
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Fluor (FLR) - Get Fluor Corporation Report slashed its profit guidance for the full year, saying it will have to record millions of dollars in charges for cost overruns on several projects.

Earnings for 2006 will probably be $2.40 to $2.60 a share, Fluor said, down from its previous outlook of $2.90 to $3.20 a share.

Shares of Fluor slumped 8% to $75.74 in extended trading Tuesday.

The engineering and construction company said its third-quarter results, scheduled to be released Nov. 6, will include roughly $168 million in pretax charges for cost overruns. The biggest is a provision of $133 million relating to its U.S. embassy projects.

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Additionally, Fluor will record $13 million in charges for U.S. Air Force work in Afghanistan and a provision of $22 million for a highway project in California.

"In hindsight, we should not have pursued the embassy market, and while there can be no guarantee as to the impact of future events, we do believe that we have the financial impact from the embassies behind us," said Chairman and Chief Executive Alan Boeckmann. "Our major markets continue to be very robust, offering Fluor substantial opportunities to grow and flourish."

For 2007, Fluor issued an initial forecast for earnings of $3.50 to $3.80 a share.