Fluor Company | Do My Homework

Financial Leadership Profile

  • David T. Seaton- He is the Chief Executive Officer (CEO) of Fluor Constructors International since 1985.
  • Michael Steuert is eth senior Vice President and Chief Financial Officer of Fluor Constructors International since 2001

Mr. Michael Steuert is responsible for implementing the global financial strategy of the company. He has also served as a senior vice president as well as chief financial officer for Litton industries (Fluor Corporation, 2010). During his tenure at Litton, he implemented a variety of corporate initiatives which resulted in improvement in shareholding value before the acquisition of Northrop. Prior to joining Litton Industries, Steuert also served as a senior vice president and financial officer for GenCorp Inc which is a diversified automotive, aerospace company and specialty chemicals.

  1. Michael Steuert experience in the financial sector can be traced back in 1971 where his financial management career begun. He begun working with TRW upon which he served in several positions of management in a period spanning 15 years, He was also a director of finance in charge of European operations of the same company. He holds a bachelor’s and masters degree from Carnegie Mellon University as well as completing post graduate training at Harvard University (Fluor Corporation, 2010). He has a global financial expertise characterized by the ability of creating as well as managing successful financial activities.

Current Company Performance

Oil & Gas: This service has increased by 21 percent hence resulting to $14.3 billion. This has also been as a result of the award of a Canadian oil sands project in eth third quarter as well as the $3.5 billion Santos LNG project in Australia. They target the segments of customers that require low cost execution of projects. Another aspect that Fluor tries to address is to perform more work in the projects home country (Fluor Corporation, 2010). The concept generated a dispersed execution model that enables high leverage of the global network as well as driving significant costs and schedule efficiencies.

                  Government: This group has resulted in successful undertakings through offering services to the US. Agencies. The agencies include the Department of Energy, Defense, State and Homeland Security. It is a contractor of choice due to its ability to quickly mobilize and deploy resources.

Power: In order to meet the growing demand with regard to clean energy, the Power group is committed to designing, building, commissioning and retrofitting facilities. The company observes large scale engineering and construction that aims at making it a continuous partner of choice in the global power industry, across several technology and fuel types.

Industrial & Infrastructure: The markets of mining and metals, infrastructure that include light rail, highways and transportation networks are some of the customer segments of the company. It is also involved in the life science and manufacturing sector hence playing a vital role in the economy of the country.

Global Services: The Company also provides operations and maintenance, construction equipment services, procurement and logistics as well as temporary staffing to industrial clients through the global service group. Customers are therefore assisted in optimizing the performance of their industrial assets (Fluor Corporation, 2010). The company is making progress in the upstream arena through strategic awards in Canada, Abu Dhabi, Iraq and Qatar.

Business Risks

Reduced profits or losses: The first risk factor faced by the company is reduced profits or losses under contracts realized when the costs increase above estimates. This goes on to indicate that contract prizes are based on assumptions. Costs overrun are potential to occur if the estimates prove to be inaccurate as well as anticipated technical problems. The contracts in this case do not present an opportunity for the company to receive compensation for the additional work performed. The company will therefore have to pay liquidated damages if a project is not executed as planned.

Dependence on third party: Most of the materials used for various projects are from the third parties. The company is likely to suffer losses on the given contract if the amount required paying for subcontractors exceed the estimated amount. On the other hand, financial difficulties experienced by manufacturers and subcontractors may intensify the risk (Fluor Corporation, 2010). It is also fundamental to note that relying on one contracted supplier may not result in assurance with eth ability of the market producing an immediate substitute.

Award of new contracts: Most of the revenues incurred by the company are a result of large scale and international projects award. It is therefore not within the company’s limit to state when the projects award will be handed down. This therefore positions the company in a difficult position pending the award of new products leaving an environment of fluctuations from quarter to quarter (Fluor Corporation, 2010). As a result, the company is subjected to loosing ne awards to competitors as well as revenues not being channeled from awarded projects as fast as expected.

Financial Performance

The global recession experienced in the world affected the overall performance of the company. This is suggestive by the consolidated revenue of 2010 decreasing by $1.2 billion to 20.8 as compared to the previous year. The decreased financial performance was due to the impact of charges totaling $ 343 million for the Greater Gabbard Project in the United Kingdom. The overall earnings were at $560 million down from $1.1 billion the previous year (Fluor Corporation, 2010). In an overall outlook, the performance of the company in the financial sector was adversely affected by the global recession leading to a decline in the consolidated revenue.

Investment Opportunities

I will prefer investing on Fluor Company. The prospects in the company seem to be promising with consolidated net awards for 2010 being $27.4 billion. This is an increase of $8.9 billion an indication that the mining and metal business are picking up despite the global recession. The different groups offering the services are committed in customer satisfaction. This is a leeway in attracting any investor willing to enter into partnership with the group.

Reference

Fluor Corporation. (2010). Fluor Annual Report. Retrieved 29th April 2011

from http://media.corporate-      ir.net/media_files/irol/12/124955/Fluor%20Annual%20Report%202010.pdf

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