Yahoo Finance Fluor (FLR) Secures Contract for Northvolt Battery Factory
Fluor Corporation FLR has secured an engineering, procurement, and construction management services contract for Phase One of Northvolt's large-scale lithium-ion battery factory in Heide, Germany. This milestone project marks a significant advancement in Fluor's involvement in the renewable energy sector.
Northvolt, a prominent Swedish manufacturer, specializes in batteries for consumer and industrial products, electric vehicles, and energy storage systems. The total project is valued at $4.8 billion (€4.5 billion), with Fluor set to recognize its portion in the second quarter of 2024.
Richard Meserole, president of Fluor’s Advanced Technologies & Life Sciences business, expressed enthusiasm about the partnership, highlighting its potential to accelerate the global transition from fossil fuels to renewable energy within the transportation sector.
Fluor's responsibilities encompass the construction of utilities and chemical units on the greenfield campus, with project completion slated for 2027. This contract not only strengthens Fluor's position in the rapidly growing battery manufacturing industry but also aligns with global efforts to enhance sustainable energy solutions.
Securing this high-profile contract underscores Fluor’s expertise in delivering complex, large-scale projects and reinforces its commitment to supporting the renewable energy infrastructure. This partnership with Northvolt is poised to play a pivotal role in the evolution of energy systems and the advancement of electric vehicle technology, positioning Fluor at the forefront of a sustainable future.
Share Price Performance
The demand for Fluor's services is clearly demonstrated by its robust prospect pipeline. The company is currently monitoring a list of potential projects that exceed its existing backlog by notable figures. The primary opportunities driving this demand include those in the chemicals sector, closely followed by energy transition, fuel production, as well as mining and metals and big data.
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Shares of this current Zacks Rank #3 (Hold) company have gained 9.9% year to date (YTD) compared with the Zacks Engineering - R and D Services industry’s 2.8% growth. Although its shares have underperformed its industry this year, the substantial backlog level underscores the continued strong demand for the company’s services and the recognized value it brings to its clients. Over the past 60 days, earnings per share (EPS) estimates have also increased to $2.86 from $2.84 for 2024. This depicts analysts’ optimism over the company’s prospects.
In the first quarter of 2024, Fluor successfully secured consolidated new awards amounting to $7 billion, with a book-to-burn ratio of 1.9x, which aligned with its full-year plan to achieve a book-to-burn ratio exceeding 1x.
The total backlog of Fluor stands at $32.7 billion, with 80% of it being reimbursable. The reported value portrays 27.7% year-over-year growth.
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Fluor Corporation (FLR): Free Stock Analysis Report
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