News Summary
Fluor Corp is on the verge of significant change as activist investor Starboard Value acquires a stake in the company. The firm aims to enhance Fluor’s value by restructuring investments, particularly in NuScale. Starboard has proposed monetization options, including a tax-free spin-off. Fluor, a major player in construction and engineering, has demonstrated willingness to engage positively with Starboard while managing its recent financial challenges. The company continues to focus on long-term shareholder value amidst fluctuating earnings and a growing backlog.
Texas – Activist investor Starboard Value has acquired a significant stake in Irving-based Fluor Corp, advocating for strategic changes to enhance the company’s business model and shareholder value. Starboard aims to unlock substantial value for shareholders, particularly by suggesting that Fluor separate its stake in NuScale, a nuclear power company.
On October 21, Starboard disclosed its strategic plan in a 35-page presentation, outlining two possible monetization options for NuScale. These options include a tax-free spin-off or a taxable separation through open-market sales, exchange offers, or mandatory exchangeable bonds. This initiative signals a proactive approach to reshape Fluor’s operations and capitalize on its investments.
Fluor Corp, ranking as the 15th largest public company in North Texas and 257th on the Fortune 500 list, specializes in providing consulting services for diverse construction and engineering projects. This includes crucial undertakings such as natural gas export facilities and the decommissioning of older energy sites. The company has maintained an active dialogue with its shareholders and has committed to working collaboratively with Starboard.
In recent financial disclosures for the second quarter ending June 30, 2025, Fluor reported revenue of $3.978 billion. This figure is slightly down from $4.227 billion during the same period in 2024. Additionally, Fluor adjusted its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) guidance down from a projected range of $575-$675 million to a revised range of $475-$525 million. The adjusted earnings per share (EPS) forecast was similarly lowered from $2.25-$2.75 per share to $1.95-$2.15 per share.
The company’s various business segments have exhibited mixed performance during this quarter. The Urban Solutions segment reported a profit of $29 million, a considerable decline from $105 million in the second quarter of the previous year. The Energy Solutions segment also faced a downturn, generating a profit of $15 million compared to $75 million in the same quarter of 2024. Meanwhile, the Mission Solutions segment’s profit stood at $35 million, down from $41 million year-over-year.
Despite these challenges, Fluor reported a notable increase in its backlog, rising 5% to $20.5 billion from $19.6 billion a year prior. The new awards for the quarter totaled $1.768 billion, reflecting a decrease from $3.098 billion year-over-year, indicating a potential slowdown in new project acquisitions.
The company has planned a conference call for August 1 at 8:30 AM Eastern Time to further discuss these financial results and the ongoing strategies aimed at stabilizing and improving shareholder value. Fluor’s financial outlook indicates an ongoing commitment to adjusting operations and responding to shareholder feedback, which is particularly critical in the increasingly competitive landscape of engineering and construction.
Fluor’s recent net loss, attributable to factors such as equity method earnings and taxes, underscores the importance of these proposed changes and the strategic realignment that Starboard Value is advocating. Moving forward, both Fluor and its stakeholders will need to navigate these shifts carefully to enhance performance and ensure long-term sustainability in a demanding market.
Deeper Dive: News & Info About This Topic
- WFAA: Activist Investor Starboard Pushes for Changes at Fluor
- Business Wire: Fluor Reports Second Quarter 2025 Results
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- Business Wire: Fluor Reports First Quarter 2025 Results
- Business Wire: Fluor Completes Successful Sale of NuScale Class A Shares
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