NuScale and Fluor: It was the best of times, it was the worst of times

By Kennedy Maize

Texas-based engineering, energy, and construction giant Fluor Corp. (NYSE:FLR) announced dismal 2nd quarter earnings last week (Aug.1), with only its holdings of the soaring stock of  Oregon-based small modular reactor firm NuScale Power (NYSE:SMR) propping up its financials.  Revenue fell 6%, adjusted earnings dipped 42% to $96 million, profits plunged 60%.

Oilprice.com noted, “While the company booked a $3.2 billion pre-tax windfall from its investment in NuScale Power’s small modular reactor (SMR) venture, its core business faltered….”

Moments after Fluor’s Friday announcement, its stock took a nosedive of more than 27%, according to Construction Dive.

In an earnings call with analysts, CEO James Breuer took an indirect shot at the Trump administration’s erratic tariff extravaganza. He said, “Over the past couple of months, we’ve seen more clients continue to take a wait-and-see approach due to a variety of reasons, including ongoing trade policy discussions and developments, cost escalation and interest rates. In a few cases, we’ve seen project cancellations or extended deferrals.”

On the day before Fluor’s earnings report, NuScale (NYSE:SMR) and Fluor (NYSE:FLR) announced a deal at the Securities and Exchange Commission, known technically as an “exchange and lockup agreement.” Under the terms, Fluor Corp, which was the financial angel in NuScale’s early days and remains its largest shareholder, would exchange up to 15 million Class B shares it owns for Class A common stock. Fluor owns about 126 million Class B shares and 133 million Class A shares of NuScale.

The deal would allow Fluor to sell the converted NuScale stock. Fluor agreed to hold onto the shares for 30 days and sell no more than 5% at any one time through 2026. That’s designed to prevent pushing NuScale’s stock into a tailspin.

At a recent range for NuScale shares of around $45, Fluor could end up with around $675 million, a significant injection of cash.

NuScale shares dipped with Fluor’s announcement that it would sell off the shares, dropping 11%. Whether a continuing slide is likely unknown. The shares fell from $50.52 on July 1 to $44.43 on Aug. 4.

Motley Fool analyst Rich Smith commented, “As Fluor pointed out, gains in the value of its NuScale shares contributed $3.2 billion in ‘pre-tax mark-to-market gains’ on its profit in Q2 — but the roller-coaster ride that is NuScale is also contributing to ‘volatility’ in Fluor’s results, and forcing Fluor management to make ‘recurring fair value measurements’ as it tracks NuScale’s ups and downs.” Smith concluded, “With NuScale stock up fivefold over the past year, and this new risk on the horizon, it looks like a good time to sell.”

Yesterday (Aug. 7), just six days after Fluor’s earnings announcement, NuScale followed suit, releasing far happier results, although the firm is still operating slightly, and expectedly, in the red.

NuScale ended the quarter with assets of $606 million, compared to $545 million for January through March. Revenue increased to $8.1 million for $1 million in the first quarter, the result of the flow of funds from the work on a Romanian project. The books showed a loss of $18 million (13 cents/share) versus $28 million (31 cents/share) for the prior quarter.

Founded in 2007, NuScale is the most mature of the scores of small modular reactor ventures currently spread out on the nuclear energy landscape. It’s 77-MW “Power Module” offering is the only SMR with design approval from the U.S. Nuclear Regulatory Commission. The modules can be built up to 12 on a site, for a total plant capacity of 924 MW.

The company’s first effort, using a smaller, 50-MW design that also had NRC design certification, never got off the ground in Utah for local economic reasons and died in 2023. NuScale and Fluor today are working on a project in Romania, with U.S. Export-Import Bank backing.

The Ex-Im bank in October 2024 agreed to a $98 million loan to Fluor for a six-reactor project at Doicești, on the site of a former coal-fired power plant. That is an installment on a 2023 commitment of up to $4 billion in a financing package supported by the Biden administration including the Ex-Im Bank and the U.S. International Development Finance Corporation.

In an earnings conference call, NuScale CEO John Hopkins justifiably bragged that NuScale “remains the only technology provider to obtain NRC design approval, positioning us well ahead of others in the market.” He also said the company had made a wise decision sticking with well-understood pressurized light water technology, rather than pursuing so-called advanced approaches.

Hopkins also pointed out that NuScale is the only U.S. SMR provider that is actually in the reactor manufacturing stage, with the power modules under construction by Doosan Enerbility (formerly Doosan Heavy Industries). He said NuScale and Doosan have the current capacity to turn out 20 of the Power Modules annually.

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