Fluor Corporation Q3 FY2025 earnings call

• Pivoted from a strategic investor to a market-focused solution with NuScale, converting remaining investment to Class A shares and planning to monetize starting next week.
• Revenue for the third quarter was $3.4 billion, with consolidated new awards of $3.3 billion (99% reimbursable) and total backlog around $28 billion (82% reimbursable).
• Strengthened financial discipline, maintained a robust capital structure, and returned substantial capital to shareholders. Focused on project delivery and fair contract terms with a majority reimbursable backlog.

Urban Solutions reported a profit of $61 million in the third quarter. New awards for the quarter totaled $1.8 billion, representing 73% of Fluor's total backlog. In Infrastructure, progress continued on remaining loss projects like Gordie Howe, with anticipation of completion in Q4/early 2026. Energy Solutions had a segment loss of $533 million in the third quarter due to the Santos litigation, with new awards totaling $222 million. Mission Solutions reported a segment profit of $34 million in the third quarter, with new awards amounting to $1.3 billion, including a $1.1 billion 6-year contract for the DOE.

• Increased 2025 adjusted EBITDA guidance to $510 million to $540 million and adjusted EPS guidance to $2.10 to $2.25.
• Anticipates $800 million in additional share repurchases through the end of February 2026, putting total repurchases on pace for $1.3 billion over 15 months.
• 2026 EBITDA is expected to be marginally better than 2025, with new awards outlook of $13 billion and revenue roughly flat with 2024 excluding Santos effect.

• Trade and policy uncertainty, oversupply of chemicals, and defunding of energy transition causing delays in clients' FIDs and impacting 2025 new awards.
• Government shutdown impacts on project prospects.
• Uncertainties related to funding the Santos litigation payment, including negotiations with insurance carriers.

Q: Jamie Cook asked about 2026 guidance, ES margins, and Santos funding.

A: John Regan responded that 2026 EBITDA is marginally better due to growth in Urban Solutions and ES resumption in Mexico, ES operating margin is influenced by LNGC handover and Mexico work, and Santos payment will come from core operations cash flow.

Q: Sangita Jain inquired about power gen and data center opportunities.

A: James Breuer discussed momentum in Mining & Metals, gas-fired power in the U.S., nuclear opportunities, and data centers, noting progress in maturing projects and being well-positioned for complex projects.

Q: Andrew Kaplowitz asked about NuScale opportunities and data center bookings.

A: James Breuer and John Regan talked about NuScale's favored position for EPC work and data center bookings being for bigger, complex projects with ongoing diligence.

Q: Steven Fisher questioned on $90 billion awards and NuScale monetization.

A: James Breuer discussed spread of awards across businesses, competitive set, and NuScale monetization as structured program with Form 4 tempo changes.

Q: Andrew J. Wittmann asked about Mexican JV cash and Santos cash.

A: John Regan explained JV level collections not on balance sheet yet and Santos payment negotiations with carriers.