Tutor Perini Corporation
) reported first-quarter 2013 net earnings of 31 cents per share,
increasing almost fourfold from the year-ago adjusted earnings of
8 cents per share, surpassing the Zacks Consensus Estimate of 23
cents. Results were driven by increased revenue on the back of
increased activity as well as reduction in general and
Excluding discrete tax adjustments and a pre-tax loss on the
sale of certain auction rate securities in the prior-year
quarter, Tutor Perini reported a loss of 3 cents per share. The
reported quarter did not note any such item.
Total revenue improved 9% year over year to $993 million,
ahead of the Zacks Consensus Estimate of $975 million. The
year-over-year improvement was driven by activity in new
hospitality and gaming projects in Calif., Ariz., and Nev.; work
performed in N.Y. in relation to the damage caused by Hurricane
Sandy; and increased activity in a tunnel project in
Barring the Management Services, revenues improved across all
the segments, led by Building with a 24% increase to $425
million, followed by Civil and Specialty Contractors both with a
13% rise to $284 million and $302 million. The Management
Services suffered a 30% decline to $47 million.
Cost and Margins
Adjusted cost of sales increased 8% to $892 million. Gross
profit increased 16% to $100 million. Gross margin improved 70
basis points (bps) to 10.1% in the quarter. General and
administrative expenses decreased 7% to $64 million in the
quarter. Operating profit increased 113% to $36 million.
Operating margin expanded 170 bps to 3.6%.
As of Mar 31, 2013, cash and cash equivalents were $132
million versus $168 million as of Dec 31, 2012. Cash from
operating activities was an outflow of $84 million in the quarter
compared with $25 million in the prior year quarter.
Long-term debt, excluding current portion, amounted to $737
million as of Mar 31, 2013, compared with $669 million as of Dec
31, 2012. The debt-to-capitalization ratio increased to 41% as of
Mar 31, 2013, compared with 39% as of Dec 31, 2012.
Backlog and Pending Orders
Total backlog as of Mar 31, 2013 was $5.5 billion compared
with $5.6 billion as of Dec 31, 2012. Backlog increased in the
Civil, Specialty Contractors, and Management Services segments,
offset by a decline in the Building segment. Additions to backlog
worth mentioning during the quarter include two educational
building projects in Calif. valued at $234 million, the
construction contract for the Hudson Yards South Tower in N.Y, a
$58 million transit signal modernization project in New York, and
a $40 million federal facility in Miss.
In Apr 2013, Tutor Perini was identified as the lowest bidder
for the initial segment of the California High-Speed Rail project
(bid valued at approximately $985 million) and for the San
Francisco Municipal Transportation Agency's Third Street Light
Rail Program Phase 2 - Central Subway project ($840 million).
These two major pending civil awards are expected to add over
$1.3 billion of backlog upon execution of the respective
contracts. Including these two projects, Tutor Perini's total
volume of pending awards currently stands at $6.5 billion. This
includes up to $3.7 billion in additional large phases of the
Hudson Yards project, and various educational, hospitality and
gaming, government, and bridge projects. These awards are
expected to enter the Tutor Perini's backlog over the next
Outlook for 2013
The company expects earnings in the range of $1.65 to $1.90
per share. Revenue is expected to be within $4.5 to $5
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. The stock retains a short-term
Zacks Rank #4 (Sell).
Other stocks to consider in the same industry with a favorable
Zacks Rank are
Chicago Bridge & Iron Company N.V.
Orion Marine Group, Inc
Zhejiang Expressway Co. Ltd.
), which retain a Zacks Rank #2 (Buy).
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