Results: Fluor Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Fluor Corporation (NYSE:FLR) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of US$4.2b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$0.97 an impressive 57% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Fluor

Taking into account the latest results, the most recent consensus for Fluor from nine analysts is for revenues of US$17.5b in 2024. If met, it would imply a solid 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 26% to US$2.77. Before this earnings report, the analysts had been forecasting revenues of US$17.4b and earnings per share (EPS) of US$2.61 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$50.56, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Fluor at US$61.00 per share, while the most bearish prices it at US$42.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Fluor is forecast to grow faster in the future than it has in the past, with revenues expected to display 23% annualised growth until the end of 2024. If achieved, this would be a much better result than the 1.7% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.0% annually. Not only are Fluor's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Fluor following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Fluor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Fluor going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Fluor .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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