On Tuesday, Fluor Corporation announced its financial results for fiscal year 2019 and Q4 of 2019, as well as the news that the United States Securities and Exchange Commission (SEC) is conducting an investigation into the company's past accounting and financial reporting.
The SEC has requested documents pertaining to projects the company recorded charges for in the Q2 2019. As a result of the probe, Fluor is conducting its own internal review of reporting and financial statements. In its press release, Fluor stated that due to the investigation, the company does not expect to complete and file its year-end annual report before the end of the month.
The Irving, Texas-based general contracting and engineering firm also announced it will not be divesting government services business segment, after announcing plans to sell the division late last fall. Fluor still plans to sell the AMECO equipment business at this time.
Chief Executive Officer Carlos Hernandez said the following regarding the decision: “We are excited about retaining this important and attractive asset that provides us exposure to long-term clients, with less-cyclical projects, cost-reimbursable contracts and high cash flow potential all drive our companywide focus on having an appropriate mix of risk in our backlog. Furthermore, our significantly enhanced risk criteria and oversight will play a critical role in how we manage the government business going forward.”
Almost immediately following the announcement, Fluor Corp. shares dropped 27% to an almost 17-year low.