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Monday, Sep 26, 2022

Engineering Billings Steady Amid ‘Recessionary Environment’

Local Firms Willdan, SPEC Grow OC Work

Engineering firms with operations in OC reported a stable amount of business for the 12 months ended June 30, overcoming challenges emerging from the recessionary environment.

The 22 companies on this week’s list reported Orange County’s local billings were flat at $1.2 billion for the year ended June 30. That’s down from last year when companies on the list reported a 3.1% increase.

Business for locally based engineering firms outpaced the sector as a whole.

Of the nine engineering firms with headquarters in Orange County, six reported increases in revenue over the past year, while one was about flat from the year prior.

The highest ranked locally based firm was once again SPEC Services Inc. in Fountain Valley, which posted a 23% jump in billings to $43.8 million. SPEC is known for providing engineering work on projects like pipelines, gas production and wastewater for customers like Chevron, the Southern California Gas Co. and the Orange County Water District.

Another big grower locally was Anaheim’s Willdan Group Inc., which increased revenue 127% to $31.5 million, helping it jump six spots to No. 11. Companywide revenue at Willdan (Nasdaq: WLDN), which has a $367 million market cap as of last week and whose services help companies increase their energy efficiency, increased, 5.6%, to $385 million during the same period.

Big Three

The three largest firms on the list accounted for $527.1 million, or about 45%, of the total OC engineering buildings.

Companywide billings climbed 5.7% to $65.6 billion, which marked a return to gains after seeing a decline during the pandemic.

The perennial leader, Fluor Corp. (NYSE: FLR), said in its second-quarter earnings that it secured $3.6 billion in new awards during the quarter, more than twice the $1.7 billion of new awards in the year-ago period. The Business Journal estimated Fluor’s OC billings were flat at $300 million.

“Our new awards for the quarter demonstrate that clients are moving forward with capital spending plans in a challenging business environment,” Fluor Chairman and Chief Executive David Constable said in a statement. “Although I am disappointed with the performance to date on a few legacy infrastructure projects, our strategic priority to pursue contracts with fair and balanced terms continues to drive a healthier backlog with as-sold margins above our expectations.”

The firm said it has $38 billion in potential future work for energy transition projects, a fast-growing segment for the firm. In one example of a new energy transition contract, Fluor signed on a large lithium chemicals project in China, for which Fluor will handle engineering, procurement and fabrication management.

Constable said the new awards have helped to offset current market uncertainties.
“We historically perform well in a recessionary environment. And we’re seeing that now,” Constable said.

Aecom (NYSE: ACM), which is based in Los Angeles and has its local office in Orange, said its OC billings declined 11% to $120 million.

“The markets in which we operate remain strong despite recessionary pressures,” CEO Troy Rudd said during the company’s third- quarter earnings call. “A global infrastructure investment renaissance, investments in environment, sustainability and resilience, and adaptation to a post-COVID new normal are secular mega trends that will continue to create growth opportunities for several years to come.”

Rounding out the top three engineering firms is Dallas-based Jacobs Engineering Group Inc. (NYSE: J), which counts an office in Irvine. Its work in Southern California includes the $2 billion widening of Orange County’s 405 Freeway and the $20 billion renovation of the Los Angeles International Airport. Its estimated OC billings were unchanged at $107.1 million.


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