Essay Company Analysis FLUOR

Submitted By ngtienthanh
Words: 6777
Pages: 28

Thanh Nguyen
FIN 4350
Company Analysis
Professor Dan Klein
19 Nov. 2012

Introduction: The U.S economy is having signs of recovery. The GDP is growing at a constant growth rate of 2.5%. The unemployment rate is decreasing year after year. The inflation is being kept at a low level: 1.7%. Disposable personal income, corporate profit and housing starts are increasing steadily and have positive forecasts in 2013. The interest rates are also kept at a low level to stimulate investments and financial market. These economic variables seem to bring good signs to corporations.
In the paper, I will introduce and analyze Fluor Corporation. There are analyses of the overall strength of the company and evaluation of its stock price. These analyses are about annual reports, important financial variables and there is an indication of the top three competitors of the company. Then, there is a comparison among financial variables of three competitors and the company to evaluate how effective the company is working. Next, I evaluate the financial condition of the company based on financial ratios and DuPont analysis and also compare it to the three competitors. After, I figure out the trend in common sized income statement and use regression method to forecast its sales in 2013 based on economic variables. Then, I analyze its cost of equity and evaluate its common stock. After all, my recommendation about the stock is that investors should buy its stock.
Company Background: Fluor Corporation is a professional services company providing engineering, procurement, construction and maintenance, as well as project management services on a global basic. It is in the industrial good sector and in the heavy construction industry. Its stocks are traded in the New York Stock Exchange. The business was originally established by John Simon Fluor, a Swiss immigrant in 1890 at Oshkosh, Wisconsin as the Fluor Brothers Construction Company and was incorporated in 1924. It established its credentials in the oil and gas industry in 1922. In 1947, it secured its first major overseas contract in Saudi Arabia. In 1981, it acquired St. Joe Minerals, along with its lead, zinc and coal operations. However, metal prices dropped after the acquisition, and in 1987, it sold its zinc operation and in 1994, it sold its lead mines. In 1995, it acquired ADP, a design and project management business; in 1996, it acquired Marshall Contractors. Over the decades, Flour has expanded its expertise across industries and around the world. Today, it is active in more than 25 countries on six continents. Fluor works in a wide range of sectors, including oil and gas, chemical and petrochemicals, commercial and institutional, government services, life sciences, manufacturing microelectronics, mining, power, telecommunications, and infrastructure. It operates in five major business divisions. Its Energy and Chemicals segment offers design, engineering, procurement, construction, and project management services to upstream oil and downstream refining, gas production, chemicals, and petrochemicals industries. This segment also provides consulting services comprising feasibility studies, process assessment, and project finance structuring and studies. The company’s Industrial & Infrastructure segment offers design, engineering, procurement, and construction services to the transportation, wind power, mining and metals, life sciences, manufacturing, commercial and institutional, telecommunications, microelectronics, and healthcare sectors. Its Government segment provides engineering, construction, logistics support, contingency response, management, and operations services to the U.S government focusing on the Department of Energy, the Department of Homeland Security, and the Department of Defense. The company’s Global Services segment offers operations and maintenance, small capital project engineering and execution, site equipment and tool services, industrial fleet…