We maintain a Neutral recommendation on
Tetra Tech Inc.
The company reported an increase in its top- and bottom-line
figures during the second quarter of fiscal 2012. New order uptake
increased its backlog in comparison with the prior year. The
company also performed well in its international market,
benefitting from the rising demand for water related services.
Further, good returns from the US as well as international markets
prompted the company to increase its revenue guidance for fiscal
2012. The company's results in the quarter exceeded its targeted
long-term growth rate of 15% of revenue and income.
Tetra Tech's revenue is derived from a diverse client base,
including the Federal government, State and local government,
Commercial and International. No single commercial client accounted
for more than 10% of Tetra Tech's revenue in fiscal 2011. The
company continues to see strong demand for its water-related
services from a broad base of industrial clients in the U.S. and
abroad. Work from the U.S. government remained stable. Further, the
company continuously evaluates the marketplace for strategic
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 and any delay in budgets
would have a material adverse impact on revenue. During
second-quarter 2012, the U.S. federal government business of Tetra
Tech declined 11.2%. Due to the U.S. federal budget uncertainties,
the company continued to experience delays on new awards for
certain large construction management projects in the U.S. and
abroad. Major competitors of Tetra Tech are
Shaw Group Inc.
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
Tetra Tech currently has a Zacks #2 Rank (Buy recommendation)
over the next one-to-three months.
AECOM TECH CORP (ACM): Free Stock Analysis
(ARCAY): ETF Research Reports
SHAW GROUP INC (SHAW): Free Stock Analysis
TETRA TECH NEW (TTEK): Free Stock Analysis
To read this article on Zacks.com click here.