Fluor shares plunged in extended trading after the company said it expects third-quarter revenue to come in below Wall Street expectations.
The company announced preliminary third-quarter results on Wednesday, saying it expects revenue of about $4.6 billion. Analysts had projected third-quarter revenue of about $4.95 billion, according to a consensus estimate from Refinitiv.
The engineering and construction company said its preliminary results include pre-tax charges related to two troubled projects. But the company also said that it completed the sale of an investment, which resulted in a gain that was "much higher than expected."
In a call with analysts, Fluor Chairman and CEO David Seaton said he was "frustrated" and said that the company has "done a lot of soul searching."
He said, however, that the two projects that resulted in charges were bid by a team that "did not follow the rules." Seaton said those people are no longer at Fluor. The CEO said that the company has revised some of its review processes, accordingly.
Seaton said Fluor's project in Citrus County, Florida is "taking us double the hours to do the work that it is taking us in Virginia to do the same thing." He said that while he has had a lot of success in the past changing out management teams on flagging projects, "this one I have not been able to turn the tide on."
The other embattled project in Europe had a "significant payment" tied to an Oct. 5 deadline, which Seaton said Fluor missed.
"That day was worth a lot of money," he said.
Despite these setbacks, Seaton said Fluor is set to come out of an eight-year downturn. He said that he expects numbers to improve throughout 2019.
"We are seeing the light at the end of the tunnel and it's not a train coming at us," Seaton said.
He, however, declined to issue revised guidance and said Fluor would report its outlook when it releases finalized results on Nov. 1.
The stock fell 13 percent in after-hours trading. In the past 12 months, however, Fluor shares have climbed 32 percent as of Wednesday's close.
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