Fluor sees growth in data center, semiconductor construction

Fluor CEO David Constable reiterated his positive outlook for data center construction. The company’s second quarter financial results announcement Strong demand driven by rapid growth in cloud technology and artificial intelligence was highlighted on Friday.

Constable also expects strong investment in the semiconductor, life sciences and infrastructure sectors, highlighting that these types of projects play a key role in Fluor’s strategic focus.

“In the U.S. market alone, we expect data center electricity consumption relative to server count to reach about 35,000 megawatts by 2030,” Constable said on the conference call. “So data centers are growing a lot. The U.S. is 40% of the global market. So there’s a lot of data center work, and from what we’ve seen, it’s primarily reimbursable.”

The power consumption of data centers in the US market is approximately 17,000 megawatts in 2022That’s according to Newmark, a New York City-based commercial real estate consulting firm.

Mr. Constable said these Multi-billion dollar data centers Because of their sheer size and complexity, there are only a few contractors in the country “who can actually take on a project of this magnitude.” Most of Fluor’s data center pipeline is scheduled to begin in the fourth quarter of this year and stretch through to 2025, Constable said.

“We’re going to be first in on the data center buildout that’s coming up,” Constable said, “so we’re very bullish on data centers.”

In addition to its data center operations, Constable highlighted Flow’s efforts in other areas. High Growth SectorsFor example, the company is poised to capture opportunities in semiconductor manufacturing, life sciences and infrastructure.

New orders in these areas during the quarter included a $361 million contract for the first phase. Northvolt’s large-scale lithium-ion battery manufacturing facility Constable said on the conference call that the wins include a project in Germany, work on a petrochemical facility in Canada and a large metals project.

“We continue to see strong investment in the semiconductor space, with the outlook supported by the CHIPS Act,” Constable said on the conference call. “We see over $5 billion in potential investment over the next 12 months, ranging from small tooling opportunities to large manufacturing facilities.”

Fluor reports “strong” second quarter

Flow reported second-quarter 2024 profit of $169 million, up from $61 million in the same period a year ago. Revenue was $4.2 billion, up about 7% from $3.9 billion in the second quarter last year.

The Irving, Texas-based company’s order backlog surged to $32.3 billion in the second quarter, up about 26% from the same period a year ago. Total new orders in the second quarter were $3.1 billion, down 16% from the $3.7 billion in new orders in the second quarter of 2023, according to the earnings report.

“Flo’s second-quarter results were increasingly strong despite the usual selling and buying,” said Andrew Whitman, senior research analyst at Milwaukee-based financial services firm Baird. Research Notes“Ultimately, the quarter reflected Fluor’s transition to lower-risk contractor roles and increased exposure to new drivers in advanced facilities such as life sciences, semiconductors and data centers, which is core to our positive outlook.”