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Fluor CEO David Constable reiterated a positive view of data center construction during the announcement of the results of the second quarter of the company on Friday, highlighting strong demand due to the rapid growth of cloud technology and artificial intelligence.
Constable also expects strong investments in the semiconductor, life sciences and infrastructure segments, and emphasized the critical role of these types of projects in Fluor’s strategic focus.
“In the US market alone, power consumption to reflect the number of servers in data centers we believe will reach about 35,000 megawatts by 2030,” Constable said on the call. “So a lot of growth in data centers. The US is 40% of the global market. So lots and lots of data centers are running. And from what we’ve seen, it’s mostly reimbursable.”
Data center energy consumption in the US market reached approx 17,000 megawatts by 2022according to Newmark, a New York City-based commercial real estate advisory firm.
Constable added that these multimillion dollar data centers they are so massive and complex, there are only a few contractors in the country “who can really take on these big projects.” The bulk of Fluor’s data center pipeline will begin in the fourth quarter of this year and continue through 2025, Constable said.
“We’ll be in the mix for the upcoming data center build,” Constable said. “So we’re very bullish on data centers.”
In addition to the data center work, Constable highlighted Fluor’s commitment to others high growth sectors. For example, the company is positioning itself to capture opportunities in semiconductor manufacturing, life sciences and infrastructure.
The quarter’s new awards in these sectors include a $361 million contract for the first phase Northvolt’s large-scale lithium-ion battery manufacturing facility in Germany, petrochemical facility work in Canada and a large metals project, Constable said on the call.
David Constable
Courtesy of Fluor
“We continue to see strong investment in the semiconductor space where the outlook is supported by the CHIPS Act,” Constable said on the call. “From smaller tooling opportunities to large manufacturing facilities, there are over $5 billion in potential prospects over the next 12 months.”
Fluor posts “net” second quarter.
Fluor reported that it earned $169 million in the second quarter of 2024, compared with profits of $61 million a year ago. Its revenue reached $4.2 billion, a gain of about 7% from $3.9 billion in the second quarter of last year.
The Irving, Texas-based company’s letter book grew to $32.3 billion in the second quarter, about a 26% increase over last year’s second quarter. New awards in the second quarter totaled $3.1 billion, down 16% from $3.7 billion in new awards in the second quarter of 2023, according to the earnings report.
“Fluor’s second-quarter results were increasingly clean despite normal proposals,” said Andrew Wittmann, senior research analyst at Baird, a Milwaukee-based financial services firm. in a research note. “Ultimately, the quarter reflects Fluor’s move to become a lower-risk contractor and its growing exposure to new drivers in advanced facilities (life sciences, semiconductors, data centers), which is the core of our positive thesis.”
