Fluor Corporation

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Case Summary

Company Name
Fluor Corporation
Stock Symbol
Class Period
August 14, 2013 to May 3, 2018
Motion Deadline
July 24, 2018
Northern District of Texas

The complaint charges Fluor and certain of its officers with violations of the Securities Exchange Act of 1934.  Fluor is a holding company that, through various entities, provides engineering, procurement, construction, fabrication and modularization, commissioning and maintenance, and management services for clients (including the U.S. government) in industries such as oil and gas, chemicals and petrochemicals, mining and metals, transportation, power, life sciences and advanced manufacturing.

The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations, including that gas-fired power projects were highly problematic for the Company, and that, as a result, Fluor would face numerous execution issues, incur multiple charges impacting its financial results, and ultimately decide to discontinue the pursuit of the gas-fired power market.  As a result of defendants’ false statements and/or omissions, the price of Fluor common stock was artificially inflated during the Class Period to more than $80 per share, which allowed defendants to sell more than 420,000 of their Fluor shares at artificially inflated prices for proceeds of nearly $30 million.

Then, on May 3, 2018, after the market closed, Fluor issued a press release announcing its first quarter financial results for the quarter ended March 31, 2018.  The Company reported a net loss of $18 million and slashed its guidance from $3.10-$3.50 diluted earnings per share to $2.10-$2.50 diluted earnings per share.  In addition, during a conference call discussing the Company’s first quarter 2018 results, Fluor’s CEO stated that the Company had 12 gas-fired power projects since 2003 and that “10 of the 12 have underperformed our as-sold expectation with three suffering losses. . . . Craft labor, in this case, has been the major issue.  Therefore, Fluor will discontinue the pursuit of [the] lump-sum gas-fired power market from the end” of the first quarter.  In a May 3, 2018 report, analysts at UBS Global Research confirmed that disappointing execution had persisted at the Company in five of the last seven quarters.  As a result of this news, the Company’s stock fell $13.23 per share to close at $45.76 per share on May 4, 2018, a decline of 22%.

Class Period: August 14, 2013 - May 3, 2018
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