Dive Brief:​

• In disclosing fiscal year 2019 and Q4 2019 financial results this morning, Fluor Corp. announced that the SEC is conducting an investigation of its past accounting and financial reporting, and has requested documents and information related to projects for which the company recorded charges in the second quarter of 2019.
• Due to the investigation, the company does not expect to file conclusive full-year financial statements until the end of the month, and disclosed only select financial results on its earning call today that are "preliminary and unaudited, and could be affected by subsequent events or determinations," according to Chief Financial Officer D. Michael Steuert​.
• The Texas-based general contracting firm, the country's second-largest by revenue, also announced that it will retain its Government Services business, which it had previously planned to divest. A plan to sell its AMECO equipment business remains unchanged and company leaders said they hope to finalize a buyer by the end of the second quarter and to close the deal by the end of the third.

Dive Insight:

Last fall, as part of a strategic review process, Fluor leaders announced that they were initiating plans to sell AMECO and the firm's government business for a total of about $1 billion. CEO Carlos Hernandez said at that time that the divestment would allow the company to refocus on its core strengths.

But as they worked through the fourth quarter and realized some of the early benefits of the restructuring plan, company leaders said they gained confidence in the government segment's "solid liquidity position and viable options for generating cash flow" such that they no longer deemed it advisable to proceed with the sale, according to a press statement. Hernandez noted that the business, which offers support services, laboratory management, nuclear and national security operations,​ had garnered the interest of many buyers.

The limited financial information disclosed today included a year-end cash balance of $2 billion, which was up slightly from a year ago. The company also announced new awards of $12.6 billion and expected backlog of $32.7 billion, broken down by segment:

• Energy & Chemicals: Full-year new awards were $3.7 billion, compared to $10.6 billion in 2018. Ending backlog is expected to be $14 billion compared to $17.8 billion a year ago.
• Mining & Industrial: Full-year new awards were $1.9 billion, compared to $8.7 billion in 2018. Ending backlog is expected to be $5.4 billion, compared to $8.9 billion a year ago.
• Infrastructure & Power: Full-year new awards were $2.6 billion, compared to $2.1 billion in 2018. Ending backlog for the segment is expected to be $6.9 billion, compared to $6.3 billion a year ago.
• Government: Full-year new awards were $2.2 billion, compared to $4.1 billion in 2018. Ending backlog is expected to be $3.8 billion, compared to $4.6 billion a year ago.
• Diversified Services: Full-year new awards for this segment, which includes some retained AMECO operations, were $2.2 billion, compared to $2.1 billion in 2018. Ending backlog is expected to be $2.5 billion, up from $2.3 billion a year ago.

Looking ahead to 2020, Fluor executives said they anticipate modest revenue growth compared to 2019.

"We've set the path that 2020 is going to be a transition year for us," Hernandez said. "We understand there's a lot of unknowns still in 2020 but we're going to see a lot of progress as we go through the year."