Fluor sees wind project delays hitting 3Q results

AP News
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Posted: Oct 18, 2010 1:35 PM
Fluor sees wind project delays hitting 3Q results

Shares of Fluor Corp. slid more than 5 percent Monday after the company announced cost increases at a wind project off the coast of the United Kingdom.

The engineering and construction firm said its third-quarter earnings will be trimmed by about $163 million, or 90 cents per share.

Fluor said its full-year earnings will now be between $2.20 and $2.50 per share, compared with a previous estimate of $2.90 to $3.20 per share. Analysts had expected $3.05 per share.

The Greater Gabbard offshore wind project had several setbacks during the third quarter, including material and equipment delivery issues, mostly relating to the installation of wind turbine generators and underwater cabling. Because of these delays, which have been made worse by weather, the company said it is faced with "substantial costs" for extra vessels and other subcontractor costs for installation and repairs.

The company was awarded a $1.8 billion contract to build the 500 megawatt wind farm off the east coast of the U.K in 2008.

Through the second quarter of 2010, the company recorded $202 million in claims relating to a dispute regarding certain design specifications related to the project.

Additional costs from that dispute are expected to be recorded in the future.

Greater Gabbard is expected to be completed in early 2012.

Company shares fell $2.79 to $49.08.