Tetra Tech Inc.
) reported third-quarter fiscal 2012 earnings per share from
continuing operations of 45 cents, above the Zacks Consensus
Estimate of 44 cents and the prior-year earnings of 38
Total revenue in the quarter was $684.7 million, an increase of
1.6% year over year. Revenue, net of subcontractor costs, was
$516.9 million, up 7.6% from the prior-year quarter. Subcontractor
cost in the quarter was $167.8 million, down 13.2% from the year
Backlog at the end of the reported quarter was recorded at $2.06
billion versus $1.88 billion at the end of the prior year
Income & Expenses
Operating income in the quarter amounted to $46.3 million, up
17.4% year over year. Earnings before interest, taxes,
depreciation, and amortization (EBITDA) increased 12.6% year over
year to $59.1 million. Interest expenses are $1.4 million in the
quarter compared with $1.7 million in the previous year
Tetra Tech generated cash flow from operations of $56.8 million
in the quarter compared with $55.8 million in the prior-year
The company expects that diluted earnings per share will be
within 45 cents to 50 cents in the upcoming fourth quarter of
fiscal 2012. Revenue, net of subcontractor cost, is projected to
lie within $525 million to $575 million in the fourth quarter.
With a rising demand for water-related services in international
and the US commercial markets from industrial clients, the company
raised it fiscal 2012 earnings per share guidance range from $1.59-
$1.66 to $1.61 to $1.66. The revenue, net of subcontractor
cost in fiscal 2012, is likely to be within $2.0 billion to $2.1
Tetra Tech Inc. is a leading provider of consulting,
engineering, program management, construction and technical
services focusing on resource management and infrastructure. It
serves its clients by providing cost-effective and innovative
solutions to fundamental needs for water, environmental and
alternative energy services.
Its solutions include applied science, research and technology,
engineering, design, construction management, construction,
operations and maintenance, and information technology. Major
competitors of Tetra Tech are Arcadis NV,
Shaw Group Inc.
We currently maintain our 'Neutral' recommendation on Tetra Tech
Inc. The stock also bears a Zacks #3 Rank, implying a 'Hold' rating
over the next one-to-three months.
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