This summary is based on the second quarter fiscal 2008 earnings call conducted by Fluor Corporation (FLR: chart) on August 11, 2008.

Management:

VP, Corporate Finance and IR: Kenneth H. Lockwood
Chairman and CEO: Alan L. Boeckmann
Sr. VP and CFO: D. Michael Steuert

Key Investors Issues

- EPS were $1.13 a share compared to 53 cents a share last year.
- Net income more than doubled to $209.3 million from $95.6 million a year ago.
- Revenue rose by 37% to $5.8 billion, up from $4.2 billion in the second quarter of 2007.

Second Quarter Highlights

Net earnings rose 119% to $209 million.

- That represents $1.13 per share, and that compares with $96 million or 53 cents per share for the same period last year.
- Operating profit more than doubled to $392 million compared with $187 million in the second quarter of 2007. All business segments contributed to this positive result by posting solid growth and profit over the last year.
- Results included a pre-tax gain of $79 million, translated into 26 cents per share from the sale of joint venture interest in the Greater Gabbard offshore wind farm project.

Operating margin rose to 6.8% and that was up from 4.4% a year ago, reflecting improvement in all segments, and the Greater Gabbard equity sale.

- Revenue rose by 37% to $5.8 billion, up from $4.2 billion in the second quarter of 2007, driven primarily by significant growth in the oil, gas, and power segments.
- New awards with new project awards totaled $6.4 billion, which compares with $5.8 billion a year ago. The quarter included a $1.8 billion award for the Greater Gabbard offshore wind farm project in the United Kingdom, which will provide carbon neutral renewable electricity for more than 415,000 homes.
- Other large awards included refinery upgrade projects in the U.S., which had a combined value in excess of $1 billion. Consolidated backlog rose to $33 billion. That is up 28% from a year ago and up $1.5 billion over the prior quarter.

Corporate G&A expense was $62 million, up from $52 million a year ago, mainly due to an increase in compensation expense resulting from strong operating performance and an increase in the company''s stock price which reflects expense associated with various share-based plans.

- Net interest income was $14 million, compared with net interest income of $8 million last year, reflecting returns generated by higher cash balances. The effective tax rate was 39%, which was above expected rate of 38%.
- Consolidated cash amount for securities balance at June 30th was $2.4 billion, up sharply from $1.9 billion last quarter or $1.5 billion a year ago. This increase was driven by strong cash flow from operations including client advances.
- Capital expenditures were $68 million, including equipment for Mico, additions to computer infrastructure, and upgrades to systems. On July 16th, Fluor completed a 2-for-1 stock split, as in June 30th there were 18.5 million shares outstanding, whereas Board approved a normal quarterly dividend of $12.5 per share payable on September 5th, 2008.

Fluor’s Oil & Gas segment reported revenue of $3.3 billion, up 56% from the second quarter of 2007.

- Operating profit grew by 68% to $169 million. These strong results are primarily the result of increased project execution activities.
- New oil, gas and petrochemical awards in the second quarter totaled $3 billion, including large refinery upgrade projects in the United States which had a combined value in excess of $1 billion.
- Ending backlog at June 30, 2008 for Oil & Gas rose to $20.9 billion, a 49% increase from a year ago.

Fluor’s Industrial & Infrastructure segment reported revenue of $912 million, up 4% over last year.

- Operating profit rose from $23 million a year ago to $121 million, including $79 million from the sale of Fluor’s joint venture interest in the Greater Gabbard Offshore Wind Farm project. Improved operating performance was driven primarily by the mining and metals and infrastructure business lines.
- Segment new awards of $2.4 billion included the $1.8 billion Greater Gabbard project.
- Backlog rose to $7.1 billion, up 25% from $5.7 billion a year ago.

Revenue for the Government segment was $300 million, compared with $325 million a year ago.

- Operating profit was $11 million, up from $9 million a year ago. The formal protests of the Savannah River and LOGCAP IV contract awards were favorably resolved.
- The company expects to book a new award for the first year of the Savannah River contract in the third quarter of 2008, and will record backlog for LOGCAP IV as individual task orders are awarded. Second quarter new awards totaled $87 million, and ending backlog was $316 million.

The Global Services segment reported revenue of $696 million, up 16% from $598 million in the second quarter of last year.