Is Tetra Tech (TTEK) Likely to Surprise This Earnings Season? - Analyst Blog


Tetra Tech Inc. ( TTEK ), a leading provider of consulting, engineering, program management is set to report third-quarter fiscal 2014 results on Jul 30. Last quarter, it posted a 23.08% positive surprise. Let's see how things are shaping up for this announcement.

Factors Influencing This Quarter

Tetra Tech's business is going strong in the oil and gas, solid waste and industrial water markets. Further, the company is intending to expand its services in the industry to private clients including Fortune 500 companies from utilities, manufacturing and chemicals, along with food and beverage sectors.

The company is also focused on streamlining its business portfolio by exiting from the fixed price construction businesses, similar to its recent exit from the U.K. business.  Such moves are aimed at reducing cost-overrun risks related to these businesses.

However, in the near term the company will have to bear the expenses from this exit, which is likely to be a drag going forward. The business can also be impacted by the continued weakness in the global mining industry, especially in developed nations.

Tetra Tech's mining business in Eastern Canada has been sluggish for more than a year, which clouds the visibility into the future. This apart, the company's business is also prone to be affected by the unfavorable currency translations as a sizeable portion of its revenues are derived from the international businesses.

Earnings Whispers?

Our proven model does not conclusively show that Tetra Tech is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP:  The earning ESP stands at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 42 cents.

Zacks Rank:  Tetra Tech has a Zacks Rank #3 (Hold) but we need to have a positive ESP to be confident about an earnings surprise.We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Arch Capital Group Ltd. ( ACGL ), with Earnings ESP of +5.1% and a Zacks Rank #2 (Buy).

Infosys Ltd. ( INFY ), with Earnings ESP of +1.24% and a Zacks Rank #2.

ACE Limited ( ACE ), with Earnings ESP of + 0.45% and a Zacks Rank #2.

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TETRA TECH NEW (TTEK): Free Stock Analysis Report

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INFOSYS LTD (INFY): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: TTEK , ACE , INFY , ACGL

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