IRVING, Texas - Fluor Corporation (NYSE: NYSE:FLR) has announced its involvement in a joint venture that has been approved by the U.S. Department of Energy (DOE) to commence work on a significant environmental management contract at the Hanford Site in Washington state. The Hanford Integrated Tank Disposition Contract, which involves Hanford Tank Waste Operations & Closure, LLC (H2C), a joint venture led by a subsidiary of BWX Technologies (NYSE:BWXT), Inc., with Fluor and Amentum as partners, has an estimated ceiling value of $45 billion over a ten-year ordering period.
The contract's approval follows the dismissal of a protest in the U.S. Court of Federal Claims earlier in the year. Fluor is set to begin recognizing its share of earnings from this new contract using the equity method of accounting starting in the fourth quarter of 2024.
The scope of the contract includes the operation of the Hanford tank farm facilities, the eventual operation of the Waste Treatment and Immobilization Plant, and responsibility for other core functions such as project management, security and emergency services, business performance, and environment, safety, health, and quality.
Tom D'Agostino, Group President of Fluor's Mission Solutions business, expressed readiness to begin work on the DOE cleanup mission, highlighting the company's longstanding presence in the Tri-Cities community since 1996. He emphasized Fluor's commitment to supporting the DOE and collaborating with other site contractors and the local community.
Fluor Corporation, with a history of over a century in providing engineering, procurement, and construction services, reported a revenue of $15.5 billion in 2023. The company is known for delivering professional and technical solutions to clients worldwide and is ranked 265 among the Fortune 500 companies.
This announcement is based on a press release statement from Fluor Corporation.
In other recent news, Fluor Corporation's Q2 2024 financial results were strong with revenues reaching $4.2 billion and new awards totaling $3.1 billion, leading to a backlog primarily composed of reimbursable contracts valued at $32.3 billion. Adjusted earnings per share were reported at $0.85, and adjusted EBITDA at $165 million. The company has also made significant leadership changes, appointing Jim Breuer as the new Chief Operating Officer (COO) and Kevin Hammonds as the new Chief Legal Officer (CLO).
In terms of analyst views, KeyBanc Capital Markets has maintained its Overweight rating and $57.00 price target on Fluor, expressing confidence in the progress and timeline of Fluor's LNG Canada facility. DA Davidson raised Fluor's price target to $58.00, maintaining a Buy rating on the stock, while Baird increased Fluor's price target to $54.00, maintaining its Outperform rating.
These developments come amidst ongoing negotiations for a strategic agreement on NuScale, a small modular nuclear reactor technology, and increased activity in Advanced Technologies and Life Sciences. Fluor Corporation maintains its 2024 adjusted EPS guidance of $2.50 to $3 and adjusted EBITDA guidance of $625 million to $675 million.
InvestingPro Insights
Fluor Corporation's recent contract win at the Hanford Site aligns well with its strong market position and financial performance. According to InvestingPro data, Fluor boasts a market capitalization of $9.23 billion and has demonstrated impressive revenue growth, with a 7.31% increase in quarterly revenue as of Q2 2024. This growth trajectory is likely to be further bolstered by the newly announced $45 billion contract.
InvestingPro Tips highlight Fluor as a prominent player in the Construction & Engineering industry, which is evident from its involvement in high-value projects like the Hanford Integrated Tank Disposition Contract. The company's strong financial position is underscored by the fact that it holds more cash than debt on its balance sheet, providing financial flexibility to undertake large-scale projects.
Investors should note that Fluor has shown significant price appreciation, with a 37.9% return over the last six months and a 45.32% return over the past year. This positive momentum may reflect market confidence in Fluor's ability to secure and execute major contracts like the one at the Hanford Site.
For those interested in a deeper analysis, InvestingPro offers 14 additional tips on Fluor Corporation, providing a comprehensive view of the company's financial health and market position.
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