Project delays and cancellations weighed heavily Fluor’s third quarter resultsalthough CEO David Constable pointed to strong demand for data centers and nuclear power, even as the company’s new awards fell from a year ago.

The data center market, particularly in North America, remains a primary focus as technology companies accelerate capital spending on hyperscale and colocation facilities, Constable said during the call.

Because of this growth, Fluor has developed an offsite modularization design and manufacturing process that should speed up the construction of these projects. This should enable the company to efficiently meet the tight schedules typical in construction of data centersaccording to the company.

“In the data center market, we continue to engage with large technology companies and expect growth in the first half of 2025,” Constable said. “The company is working on several competitive advantages for data center execution … (such as) developing innovative cooling process concepts.”

The Irving, Texas-based company also expects nuclear projects to play a larger role in its energy solutions segment. The recent US election should also help reduce some of the hesitation that affected project deadlinesthe agent said.

“We are delighted that the electoral process has produced a clear winner,” Constable said. “This creates a environment of certainty that our clients need to make major capital investment decisions.”

Fluor’s nuclear portfolio includes small modular reactors and traditional reactors. Constable added that the firm is positioned to provide carbon-free energy solutions to meet growing demands from data centers and other sectors.

“There is a strong appetite for nuclear power to meet the incredible demand for energy globally, interest has never been higher,” Constable said. “We are very excited about the opportunities for Fluor and the shareholders of Small Modular Reactors.”

Referrals from earnings

Fluor reported that it earned $54 million in the third quarter of 2024, a notable drop from a profit of $206 million a year ago. Its revenue reached $4.09 billion, a gain of about 3.3 percent from $3.96 billion in the third quarter last year.

The rest of the company grew to $31.32 billion in the third quarter, up about 20.4% from last year’s third quarter. However, new awards in the third quarter totaled $2.7 billion, down 46 percent from $5 billion in new awards in the third quarter of 2023, according to the earnings report.

Failures in its energy segment largely caused this profit decline.

Project cancellations and a delayed timeline for certain large energy projects hurt the company’s revenue results, CFO Joe Brennan said during the call. He added that “contributions from (those projects) will be generated, but it has been pushed.” A significant portion of Fluor’s energy revenue, originally expected in 2024, will now move to 2025 due to these project timing issues.

Constable added chipmaker Intel recently canceled work on a large manufacturing facility project. Overall, the earnings report was underwhelming, said Andrew Wittmann, senior research analyst at Baird, a financial services firm in Milwaukee.

“The third quarter of 2024 was not a good pattern, with financials missing expectations and weak awards,” Wittmann said in a research note. “Fluor had a charge in its energy segment and project cancellations. She pointed out the time delay of the new projects. We suspect Fluor’s macro hasn’t really changed, but the execution hasn’t been great.”