Tutor Perini Corporation
) have dipped 3% since it reported a 9% year-on-year decline in
third quarter adjusted earnings to 49 cents per share on Nov 4.
Earnings dropped due to reduced activity on certain large
healthcare and office facility projects in the Building segment
in California. The results missed the Zacks Consensus Estimate of
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Including one time items, earnings in the quarter were the same
at 49 cents. Including an impairment charge, net of tax benefit,
earnings in the year-ago quarter were 88 cents. Compared to this,
earnings in the quarter plunged 44%.
Total revenue went down 6% year over year to $1,030 million,
missing the Zacks Consensus Estimate of $1,228 million. Revenues
were affected by reduced activity on certain large healthcare and
office facility projects in the Building segment in California.
Barring Civil, revenues declined across all segments. Management
Services suffered the worst with a 28% decline to $37 million,
followed by Building with a 10% dip to $352 million and Specialty
Contractors witnessed a 9% decline to $287 million. The 8%
increase in revenues to $380 million in the Civil segment was not
enough to compensate the decline in the other three segments.
Cost of sales decreased 8% to $909 million from $984 million in
the year-ago quarter. Gross profit rose 5% year over year to $121
million. Gross margin improved 120 basis points (bps) to 11.7%.
General and administrative expenses increased 3% year over year
to $63 million. Operating profit was $58 million, a 6% increase
from $55 million in the year-ago quarter. Operating margin was
5.6%, a 60 basis points improvement from 5% in the year-ago
As of Sep 30, 2013, cash and cash equivalents were $128 million
versus $168 million as of Dec 31, 2012. Cash used in operating
activities was $11 million for the first nine-month period of
2013 compared with $28 million in the prior-year comparable
Long-term debt, excluding current portion, amounted to $670
million as of Sep 30, 2013, compared with $669 million as of Dec
31, 2012. The debt-to-capitalization ratio remained flat at 39.2%
as of Sep 30, 2013 compared with the level as of Dec 31, 2012.
Backlog and Pending Orders
Total backlog as of Sep 30, 2013, was $6.9 billion, up 24% year
over year, highest since the third quarter of 2008. In the
quarter, additions to backlog worth mentioning were - Tutor
Perini's $511 million share of the $1.022 billion joint venture
California High-Speed Rail design-build project, two Wisconsin
highway construction contracts (total value of $191 million), a
$47 million transit station electrical subcontract, and a $24
million military housing renovation project in Guam. Tutor Perini
expects a number of attractive civil infrastructure and building
projects which could be awarded in the balance of this year or
first half of next year.
Tutor Perini expects the fourth quarter to be benefited by
continued ramp-up of several large Civil projects.Tutor Perini
retained its earnings guidance for 2013, which is expected in the
band of $1.65-$1.90 per share and revenues in the range of
The company continues to win complex, civil and building
projects. Its civil market is also likely to remain strong and
the group will continue to contribute significantly to growth in
the coming quarters.
The Civil segment will deliver strong results as the tunneling
work on the Alaskan Viaduct has commenced and as the
abovementioned projects ramp up.
Building segments and margins are also expected to grow over the
next year, driven primarily by the additional phases of the
Hudson Yards projects. The Specialty Contractors segment also
continues to have a healthy pipeline of new project opportunities
to the tune of about $3 billion.
Sylmar, Calif.-based Tutor Perini Corporation is a leading civil
and building construction company offering diversified general
contracting and design-build services to private clients and
public agencies globally.
Tutor Perini currently retains a Zacks Rank #3 (Hold). Another
stock in the building and heavy construction industry with a
favorable Zacks Rank is
Jiangsu Expressway Co. Ltd.
) with a Zacks Rank #2 (Buy).
One of Tutor Perini's peers
Chicago Bridge & Iron Company N.V.
) reported third-quarter 2013 adjusted earnings of $1.12 per
share, in line with the Zacks Consensus Estimate. Adjusted
earnings improved 33% year over year on the back of strong
project activities during the quarter.
On the other hand, another peer
Granite Construction Incorporated
) reported third-quarter 2013 earnings of 28 cents per share, a
70% drop year over year and way behind the Zacks Consensus
Estimate of 78 cents.