Major commercial construction firms slip in Fortune 500 rankings

This year’s Fortune 500 list featured eight commercial/engineering firms, but unfortunately also ranked nearly all of the companies at lower spots than during 2014. Last year’s list included nine firms in the sector, but the additional company, URS Corporation, was acquired by AECOM in the fall of 2014. Quanta Services was the only commercial construction firm to rise slightly in the list. Fortune 500 ranks U.S. companies with publicly available earnings information based on their gross revenue after adjustments.

Why did almost all of these major players have poorly performing years? We take a closer look at each firm’s numbers and business activity. Declining oil and gas performance had a major role in the results, as well as weather-related delays. But will these construction giants be able to recover and rally in Fortune’s 2016 list?

Fluor: #136

Revenue: $21.532 billion (down 21%)
Profits: $511 million (down 23%)
Number of employees: 37,508
Rank last year: 109 (drop of 27 spots)
Years on Fortune 500 list: 14

Fluor, based in Irving, TX, is a global construction and engineering giant. One of the company’s most high-profile projects was the 800-mile Trans-Alaska Pipeline System. In Fluor’s report at the end of 2014, it said the decrease in revenue was due to reductions from its industrial and infrastructure segment’s mining and metals business line. An executive said the "short-term impact of oil prices and the timing of major capital investment decisions by our customers [created] uncertainty."

Jacobs Engineering: #239

Revenue: $12.695 billion (up 7%)
Profits: $328 million (down 22%)
Number of employees: 59,900
Rank last year: 237 (drop of 2 spots)
Years on Fortune 500 list: 15

Based in Pasadena, CA, Jacobs offers design, construction, consulting and maintenance services for clients in infrastructure, oil and gas, food processing, pharmaceuticals, and other industries. The company has been searching for a new CEO since former chief Craig L. Martin stepped down at the end of 2014. In a release announcing the company’s most recent quarter earnings, Jacobs’ Executive Chairman Noel Watson said the firm hopes its strong backlog will soon translate into an increase in sales, but added Jacobs is cautious in its short-term outlook.

Peter Kiewit Sons’: #286

Revenue: $10.380 billion (down 12%)
Profits: $350 million (down 30%)
Number of employees: 25,700
Rank last year: 236 (drop of 50 spots)
Years on Fortune 500 list: 16

Kiewit, based in Omaha, NE, is one of the largest construction and engineering firms in North America. It builds across several sectors, including transportation, oil and gas, mining, offices, chemical projects, and other commercial buildings. The firm is owned by employees and Kiewit family members. Recently, Kiewit has been in the news as one of the leading contractors, along with Turner Construction, dealing with the problem-filled Colorado Veterans Affairs hospital that has ended up $1 billion over budget and left officials scrambling for a source of extra funding. Builder Kiewit-Turner said it had a right to stop work on the project in December when the VA was found to be in breach of its contract, and will reportedly stop work again if the funding isn’t secured.

AECOM: #343

Revenue: $8.357 billion (up 2%)
Profits: $230 million (down 3%)
Number of employees: 43,300
Rank last year: 332 (drop of 11 spots)
Years on Fortune 500 list: 7

Based in Los Angeles, AECOM provides construction, architecture, engineering, and design services for public and private sector clients across the globe. Despite the dip in rankings and its profit decrease last year, AECOM reported mixed Q2 results in May of this year. The company’s earnings, at $0.58, beat estimates, while its revenue, at $1.88 billion, fell far below the predicted $4.43 billion. AECOM emphasized strong performance by its Construction Services segment, which grew 62% over the quarter. The company’s oil and gas projects once again underperformed as slow activity in the sector continued.

Quanta Services: #361

Revenue: $7.851 billion (up 20%)
Profits: $297 million (down 26%)
Number of employees: 24,600
Rank last year: 396 (up 35 spots)
Years on Fortune 500 list: 3

Quanta, based in Houston, is a key player in providing construction and engineering services for the electric power and oil and gas industries. During an April conference call about Quanta’s first quarter earnings, company executives said that although revenue grew, earnings per share failed to meet expectations. The company attributed this result to harsh weather, especially in Canada, delaying major projects. However, Quanta said it predicts its oil and gas infrastructure division will start to pick up steam during the rest of 2015.

EMCOR Group: #421

Revenue: $6.444 billion (no change)
Profits: $169 million (up 36%)
Number of employees: 27,000
Rank last year: 407 (drop of 14 spots)
Years on Fortune 500 list: 15

Based in Norwalk, CT, EMCOR provides electrical and mechanical construction services to clients in the commercial, utility, industrial, and institutional sectors. The company reported worse-than-expected Q1 results, with revenues remaining approximately unchanged from 2014 and net profits seeing a significant decrease. EMCOR said the disappointing numbers were the result of delays in projects in its U.S. Industrial Services segment due to a workers’ strike and severe weather reducing the number of work days available for its U.S. Electrical Construction, Mechanical Construction, and Building Services divisions. However, EMCOR said backlog grew in the majority of its sectors, and it expects that backlog to soon convert to improved results in future quarters.

KBR: #424

Revenue: $6.366 billion (down 11%)
Profits: -$1.262 billion (down 1782%)
Number of employees: 25,000
Rank last year: 360 (drop of 64 spots)
Years on Fortune 500 list: 8

KBR, based in Houston, is a major construction and engineering firm with a specialty in energy and government projects. The firm attributed the major dip in profits last year to "significant charges associated with the company’s restructuring." In April of this year, KBR released mixed Q1 results, with net income higher than the previous year and revenue lower. While other sectors didn’t perform as well as desired, KBR’s engineering and construction results grew significantly from Q1 of 2014. The company said it expects to see continued success in its oil and gas divisions, as well as in major chemical projects.

CH2M Hill: #480

Revenue: $5.414 billion (down 7%)
Profits: -$182 million (down 253%)
Number of employees: 25,000
Rank last year: 437 (drop of 43 spots)
Years on Fortune 500 list: 7

Based in Englewood, CO, CH2M Hill is a global engineering firm that offers construction, consulting, and design services for public and private sector clients. The firm is employee-owned and operates an internal stock market. Last year, CH2M Hill blamed its disappointing earnings on major cost overruns associated with a power project in the Northeast U.S. and delays on two major European projects. In April of this year, the firm announced it was rebranding as simply CH2M to create a “refreshed brand.”