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• $100M Contract for Tetra Tech - Analyst Blog
• Tetra Tech's Earnings Lag Estimate - Analyst Blog
• Will Tetra Tech Miss Earnings? - Analyst Blog

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Recently, Tetra Tech Inc. ( TTEK ) acquired a Colorado-based oil and gas pipeline planning and engineering firm, Rooney Engineering Inc. (REI). This acquisition extend Tetra Tech's services to the shale oil market. Shale oil is a crude oil that is obtained from oil shale by heating and distillation.

Currently, REI's main region of work is Bakken and Niobrara shale oil regions. It has also worked on projects across the U.S., including Alaska and the Gulf Coast. Annually, REI generates approximately $30 million in revenue. The terms of the acquisition are not yet disclosed.

Tetra Tech is an expert in water resources and front-end environmental permitting for oil and gas projects. The addition of pipeline planning and engineering through REI is a strategic fit for Tetra Tech. The combination allows Tetra Tech to provide a complete range of services to the rapidly growing shale oil market.  

The company is also performing well in its international market, benefitting from rising demand for water-related services. Favorable returns from the domestic as well as international markets led the company to increase its revenue guidance for fiscal 2012.

However, impact of a weak economic condition remains a matter of concern.  A major portion of Tetra Tech's revenue is derived from the U.S. federal government agencies; as such, any delay in budgets would have a material impact on revenue.

Tetra Tech Inc. is a leading provider of consulting, engineering, program management, construction and technical services focusing on resource management and infrastructure. It serves clients by providing cost-effective and innovative solutions to fundamental needs like water, environmental and alternative energy services.

We currently maintain our Neutral rating on Tetra Tech Inc. with a Zacks #2 Rank (short-term Buy recommendation) over the next one-to-three months.

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