Fluor Corporation (FLR) saw its shares decline 7.6% in premarket trading on Friday after the engineering and construction firm reported weaker-than-expected adjusted earnings for the first quarter and lowered the upper end of its 2026 profit outlook. The company attributed the guidance revision to higher costs on a mining project in the Americas and a temporary pause on a Middle East project linked to geopolitical uncertainties.
Q1 Earnings Miss
For the quarter ended March 31, 2026, Fluor posted adjusted earnings per share of $0.14, sharply missing the FactSet consensus estimate of $0.62. Revenue came in at $3.66 billion, below the $3.89 billion analysts had expected and down from $3.98 billion in the same period last year. Net income swung to $160 million, compared to a loss of $241 million a year earlier, boosted by asset sales.
Guidance Cut and Segment Performance
Fluor trimmed the top end of its 2026 adjusted EBITDA forecast to a range of $525 million to $560 million, down from the previous $525 million to $585 million. The company cited cost overruns on a mining job and a project delay in the Middle East due to regional risks. Adjusted EBITDA, which excludes interest, taxes, depreciation, amortization, and other charges, is now expected to come in at the lower end of the range.
Segment results were mixed. Urban Solutions profit plunged to $6 million from $70 million, pressured by $37 million in extra mining project costs. Energy Solutions profit rose to $74 million from $47 million. Mission Solutions swung to a $71 million loss after a $96 million litigation charge related to a 2013 lawsuit.
New Awards and Backlog
New project awards totaled $2.69 billion in the quarter, a steep decline from $5.81 billion a year earlier. Nearly all of the new awards were on a reimbursable basis, which carries less risk than fixed-price contracts. The company's backlog stood at $25.73 billion, with reimbursable contracts representing 82% of the total.
Cash Flow and Capital Allocation
Operating cash flow improved to $110 million from a negative $286 million in the prior year. Fluor also repurchased $516 million worth of its own shares during the quarter. Additionally, the company completed the sale of its NuScale stake in April, generating $2.4 billion in proceeds since September 2025.
New Contract and Outlook
On Thursday, Fluor announced it had been selected to provide feasibility study services for Anglo American's Woodsmith mining project in North Yorkshire, England. The financial terms were not disclosed, but the contract is expected to be reflected in second-quarter results. CEO Jim Breuer highlighted "significant" wins across sectors including gas-fired and nuclear power, refining, data centers, mining, and uranium enrichment, adding that the company's pipeline is expanding despite the quarterly charge.
Investors remain focused on Fluor's ability to convert its growing backlog into cash flow and margins, especially as cost overruns and project delays persist. The company flagged several risks, including cost overruns, geopolitical exposure, and ongoing litigation, that could push actual results away from projections.
