Fluor (FLR) Receives GCC Multiple Award Contract From Navy

Fluor Corporation (NYSE:FLR) has been selected as one of the six companies to provide construction, design-build construction and associated engineering services by Naval Facilities Engineering Command Atlantic for up to 60 months.

The Global Contingency Construction Multiple Award Contract (“GCC MAC”) has a combined value of nearly $975 million. The contract will help the Navy, Department of Defense and other U.S. federal agencies to cope with natural disasters, humanitarian assistance, conflicts and other urgent requirements.

The company’s Government segment has been providing high-quality rapid response to contingency construction, humanitarian assistance and disaster recovery support for more than a decade in the most severe and remote environments.

Fluor’s market diversity remains a key strength that helps it mitigate the cyclicality of markets in which it operates. The company’s strategy of maintaining a good business portfolio mix permits it to focus on more stable business markets and capitalize on developing cyclical markets at suitable times.

The company has a solid track record of receiving awards and the trend is expected to continue in the near term as well. At the end of 2018, its consolidated backlog came in at $40 billion, up 29.4% from the comparable year-ago period. Notably, in the fourth quarter of 2018, new awards recorded an increase of 212.2% year over year to $10.1 billion. Full-year 2018 new awards more than doubled from a year ago to $27.7 billion, courtesy of an upturn in the commodities market, given a number of significant mining and Energy & Chemical awards, including chemical and refining work in the United States, iron ore expansion in Australia, and copper projects in Latin America.

Over the last few quarters, the Stork buyout and major wins in the government business have allowed Fluor to expand its long-term recurring revenue opportunities.

Notably, shares of Fluor have gained 8.2% in the past month, comparing favorably with its industry and the S&P 500 composite’s growth of 5% and 4.2%, respectively. Ongoing contract wins and strong backlog are helping the stock to gain further.



Zacks Rank & Key Picks

Currently, Fluor carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space include Quanta Services, Inc. (NYSE:PWR) , Apergy Corporation (NYSE:APY) and KBR, Inc. (NYSE:KBR) . While Quanta Services and Apergy sport a Zacks Rank #1 (Strong Buy), KBR carries a Zacks rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Quanta Services’ earnings for the current year are expected to increase 25.3%.

Apergy has a long-term EPS growth rate of 22.5%.

KBR’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average being 15.6%.

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