Tetra Tech Inc. ( TTEK ) reported
second-quarter fiscal 2013 net income of $24.8 million or 38 cents
per share compared to $22.3 million or 35 cents in the year-ago
quarter. Despite a decent year-over-year increase, the reported
earnings missed the Zacks Consensus Estimate by 2 cents.
Total revenue in the reported quarter was $642.0 million
compared with $624.3 million in the prior-year period. Revenue, net
of subcontractor costs, was $520.9 million compared with $476.9
million in the year-earlier quarter, and failed to meet the Zacks
Consensus Estimate of $532 million. Backlog was $2.03 billion at
the end of the reported quarter, flat year over year.
The company benefited from a high demand for its water and
environmental services from commercial clients in the quarter.
Revenue from the U.S. commercial and international clients
accounted for 59% of net revenue.
Earnings before interest, taxes, depreciation, and amortization
(EBITDA) were $54.2 million, up 10.1% compared with $49.2 million
in the second quarter of fiscal 2012. Operating income in the
quarter aggregated $37.7 million compared with $35.5 million in the
Engineering and Consulting Services (
ECS , 43% of total revenue) revenue came in at
$259.2 million compared with $279.2 million in the year-earlier
Technical Support Services (
TSS , 32%) reported revenues of $222.1 million
compared with $249.3 million in year-ago quarter.
Remediation and Construction Management (
RCM , 25%) revenue totaled $178.5 million compared
with $117.4 million in prior-year quarter.
Balance Sheet & Cash Flow
Cash and cash equivalents at quarter-end was $159.6 million with
long-term debt of $264 million.
Tetra Tech generated cash flow from operations of $44.3 million
compared with $33.1 million in the prior-year period.
Management apprehends prevailing weakness in Eastern Canada and
mining to adversely impact its business in the upcoming quarters.
Management also expects revenue from oil & gas to double in
2013 to $300 million.
The company expects earnings to be in the range of 32 cents to
42 cents per share in the third quarter of fiscal 2013. Revenue,
net of subcontractor cost, is expected to be in the range of $525
million to $575 million in the imminent quarter.
For the second-half of the year, management expects revenue from
ECS segment to be 45% of total revenue with growth in Western
Canada and fall in revenue in Eastern Canada. However, TSS and RCM
segments are expected to contribute 30% and 25% of total revenue
respectively. Within the RCM segment, revenue from both Oil &
Gas and Parkland & AEG are expected to grow in the second
Tetra Tech has lowered its fiscal 2013 earnings per share and
revenue guidance. For fiscal 2013 earnings per share are expected
to be in the range of $1.60 to $1.75, down from its prior guidance
of $1.85 to $1.96. Management has also lowered its upper end of
revenue guidance and now expects to report revenue, net of
subcontractor cost, in the range of $2.15 billion to $2.25 billion
compared to its prior guidance of $2.15 billion to $2.35
Tetra Tech currently has a Zack Rank #4 (Sell). Some other
companies in the industry worth mentioning are Calgon
Carbon Corporation ( CCC ) with a Zacks Rank
#1 (Strong Buy), CECO Environmental Corp. ( CECE ) and
Fuel-Tech Inc . ( FTEK ) each carrying a
Zacks Rank #2 (Buy).CALGON CARBON (CCC): Free Stock Analysis ReportCECO ENVIRNMNTL (CECE): Free Stock Analysis
ReportFUEL TECH INC (FTEK): Free Stock Analysis
ReportTETRA TECH NEW (TTEK): Free Stock Analysis
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