Fluor Posts Loss From Lawsuit

Engineering and construction company Fluor Corp. on Monday reported a net loss in the second quarter because of a charge from a project lawsuit.

Fluor said the net loss was $16.4 million, or 19 cents a share, contrasted with a profit of $44.8 million, or 54 cents, a year earlier.

The loss resulted from a charge of $65 million, or 77 cents a share, after Fluor lost a lawsuit against the developer of a resort hotel in the Cayman Islands in the Caribbean.

Fluor, which announced the jury verdict in June, was the general contractor on the project.

“The jury verdict on the hotel project was wholly unexpected, and as we do not believe it was supported by the facts or by applicable law” the company was “pursuing all possible avenues of reconsideration or appeal,” Chief Executive Alan Boeckmann said in a statement.

Fluor, based in Aliso Viejo, said its earnings outlook for the year, adjusted for the effect of the 77-cent charge, “remains essentially unchanged and translates to a revised range of $1.55 to $1.75 per share.”

Revenue in the quarter rose by 32% to $2.9 billion.

New project awards in the quarter slipped to $3.2 billion from $3.3 billion a year earlier, while backlog rose by 21% to $15.7 billion.

“While we are obviously disappointed with the impact that the charge had on earnings in the quarter, we are encouraged by the continuing strength in new awards and backlog,” Boeckmann said.

“We are also very pleased with the substantial improvement in cash flow, with approximately $140 million generated by operations in the quarter,” he said.

Fluor shares closed down 18 cents at $63.80. After the earnings announcement the shares fell $4.80 in after hours trading to $59.