What Q1 Earnings Season Tells Us About the Core Portfolio
WestEnd clients know what we care about most when it comes to our portfolio companies: earnings.
It follows that every earnings season gives us the ability to stress test our holdings, prove or disprove our convictions, and run quality control on our ideas. For Q1 2026, our earnings scorecard was broadly encouraging.
Across the 29 Core holdings in our earnings tracker that had reported first-quarter results at the time of this writing, earnings and revenue beats were widespread, and management commentary was broadly constructive. All told, it was a strong earnings quarter on paper, but it also provided further evidence that we’re well-positioned in ‘growthy’ parts of the economy.
For the 29 Core holdings that served as part of our analysis:
Just as importantly, management commentary across the portfolio continued to reinforce many of the themes WestEnd has been emphasizing for some time.
Not Every Earnings Report Was Good—
Fluor Corp.
Fluor offers a case study for how a sizable earnings disappointment will trigger a tactical response. After the company’s disappointing Q1 results introduced more near-term execution risk and lowered the stock’s upside, WestEnd did not hesitate to sell.
Key developments from the quarter for Fluor included:
Revenue of $3.6 billion, down about 8% year over year
Adjusted EPS of $0.14 on expected EPS of $0.66, a substantial miss
2026 adjusted EBITDA guidance narrowed to $525 million–$560 million, from $525 million–$585 million
Management cited cost growth on a mining project in the Americas
Management also cited a temporary slowdown on another project due to Middle East geopolitical concerns
To be clear, Fluor did not report a broken business. The company still ended the quarter with roughly $3.2 billion in cash and marketable securities and backlog of about $25.7 billion. But in our view, this report changed the near-term risk/reward. In a quarter where many Core holdings were beating expectations, raising guidance, or reinforcing strong demand trends, Fluor introduced a different set of variables: project cost growth, geopolitical disruption, and a lower ceiling on full-year expectations.
We view our decision to sell as risk management in practice. Successful investing requires not only identifying strong opportunities, but also reassessing positions quickly when execution risk rises and the return profile weakens.
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