Fluor (FLR) reported strong quarterly results that set records for new business bookings and total backlog, on top of increasing operating margins (and a moderate gain on sale) that more than doubled net income. Earnings growth was driven by the Oil & Gas business, as well as a substantial boost in earnings from the Industrial & Infrastructure segment.

On their conference call, CEO Alan Boeckmann suggested that the recent large decline in fossil fuel prices was not going to stop infrastructure build-out, because their clients base capital projects on long-term estimates of the price of crude. There was plenty of new business booked on the Oil & Gas side, so a rapid drop in those projects is unlikely, because those types of projects are taken under the assumption that $50 or $60 crude will be realized on average. Even as lower commodity costs might seem to threaten spending to bring additional resources online, they also help on the input side with things like reduced costs for metals, steel, and petroleum distillates. In particular, Fluor cited consistently high capital spending from integrated majors Exxon Mobil (XOM) and ConocoPhillips (COP) as supportive of upstream work, while noting that downstream was more uncertain given that big players like Valero (VLO) are deferring projects out a year.

Mining is described as one of the more economically sensitive lines of work, and mining majors are worried by slowing demand out of China in particular. While existing work has been fully financed and thus has solid standing in the backlog, newer deal volumes are expected to slow because of cautiousness from Rio Tinto (RTP) and BHP Billiton (BHP). This morning, Freeport McMoRan (FCX) announced that they were halting work necessary to restart their molybdenum mine in Colorado – a $500 million capital project that is about one-third complete at present.

Fluor is also starting to see work from the US Army’s LogCAP IV contract, on which the company competes with DynCorp (DCP) and KBR for individual projects.