Tetra Tech Inc.
) reported its first-quarter fiscal 2013 earnings per share from
continuing operations of 41 cents, in line with the Zacks
Consensus Estimate and 15.8% above the prior-year earnings of 36
cents. Profits during the quarter were driven by strong
growth in both the international and the U.S. commercial
Total revenue in the quarter was $658.5 million compared with
$682.6 million in the prior year period. Revenue, net of
subcontractor costs, was $497.2 million compared with $492.1
million in the prior-year quarter. Subcontractor cost in the
quarter was $161.3 million compared with $190.6 million in the
The company benefited in the quarter from a high demand in the
international and U.S. commercial markets as well as the Parkland
acquisition. Backlog was $1.9 billion at the end of the reported
quarter, flat year over year.
Earnings before interest, taxes, depreciation, and
amortization (EBITDA), were $54.1 million, up 5.9% compared with
$51.1 million in the first of fiscal 2012. Operating income in
the quarter amounted to $41.8 million compared with $36.1 million
in the prior-year quarter.
Tetra Tech generated cash flow from operations of $17.8
million compared with $38.3 million in the prior-year period.
The company expects diluted earnings per share to be in the
range of 38 cents to 42 cents in the second quarter of fiscal
2013. Revenue, net of subcontractor cost, is expected to be in
the range of $500 million to $550 million in the quarter.
Tetra Tech increased its fiscal 2013 earnings per share and
revenue guidance based on its growth in international and US
commercial markets. For fiscal 2013 earnings per share are
expected to be in the range of $1.85 to $1.96 (up from prior
guidance of $1.80 to $1.85) and revenue, net of subcontractor
cost, is expected to be in the range of $2.15 billion to $2.35
billion (up from prior guidance of $2.1 billion to $2.3
The company is deriving significant benefits from its
acquisition of Parkland, which enabled the company to expand its
operations for oil & gas customers to approximately 10% of
However, demand for state and local government services is
cyclical and vulnerable to economic downturns; and if the economy
weakens, its revenues, profits and financial condition may
deteriorate. The company derives a majority of its revenue from
government agencies, and any disruption in government funding or
in its relationship with those agencies could adversely affect
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 for water, environmental and
alternative energy services.
It typically begins at the earliest stage of a project by
applying science to problems and developing solutions tailored to
clients' needs and resources. Its solutions may span the entire
life cycle of the project and include applied science, research
and technology, engineering, design, construction management,
construction, operations and maintenance, and information
Tetra Tech Inc. currently has a Zacks #2 Rank (Buy). The other
companies that can also be considered at the moment are
), both of which have a Zacks Rank #2.
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