(Adds CEO comments on Pascua-Lama, details on backlog)
By Braden Reddall
Oct 31 (Reuters) - Fluor Corp posted a higher quarterly profit on Thursday, but its engineering project backlog shrank as the oil and gas division could not make up for lost mining work and its 2014 outlook fell short of what analysts expected.
Shares of Fluor, the largest publicly traded U.S. engineering company, dropped nearly 4 percent in after-hours trade, extending a 2 percent decline in regular trading.
Earlier on Thursday, in a sign of miners’ struggles, Fluor client Barrick Gold Corp said it would stop development of its Pascua-Lama mine indefinitely. Nevertheless, Fluor said it would keep future work on the South American mine in its backlog in anticipation of a restart.
“It’s a suspension, not a cancellation,” Fluor Chief Executive David Seaton said. “I feel confident that we will be a participant in that phased approach when they start that project back up.”
Fluor said it now expected 2014 earnings per share of $4.10 to $4.60, while Wall Street analysts’ average estimate had previously been $4.60, according to Thomson Reuters I/B/E/S.
“Clearly, things like Pascua-Lama, the headwind, that is included in that range,” Seaton told analysts on a call.
Fluor’s third-quarter net profit was $173 million, or $1.05 per share, up from $145 million or 86 cents per share in the year-earlier period. Analysts expected $1.04 per share.
The profit growth came despite an unexpected decline in revenue to $6.68 billion from $7.14 billion a year before.
Fluor’s project backlog fell by $500 million in the quarter to $36.5 billion. Half the backlog is now oil and gas work, while lower mining awards has led to a $4 billion drop in the industrial and infrastructure group’s backlog over the past year to below $14 billion.
In the third quarter, Fluor’s oil and gas business saw profits rise 24 percent, but the industrial and infrastructure group’s profits declined 9 percent compared with a year before.
For 2013, Fluor tightened its earnings outlook to a range of $3.90 to $4.10 per share, versus $3.85 to $4.20 before.
Shares of Fluor have risen 26 percent so far in 2013, compared with 15 percent for KBR Inc and 60 percent for Chicago Bridge & Iron. (Reporting by Braden Reddall in San Francisco; Editing by Bernard Orr, Matthew Lewis and Tim Dobbyn)