Tutor Perini Corporation
) gained 9.45% to close at $30.91 yesterday on the back of 6%
year-over-year increase in its first-quarter earnings to 33 cents
per share. Tutor Perini delivered a solid earnings surprise,
beating the Zacks Consensus Estimate of 20 cents by 65%. Volume
increase in the Civil segment led to the year-over-year
Total revenue went down 4% year over year to $955 million, missing
the Zacks Consensus Estimate of $1,050 million. The decline was
mainly due to decreased activity on hospitality and gaming projects
in California, Arizona, Nevada and Louisiana, which was partially
offset by the ramp-up of civil and building projects at Hudson
Yards in New York and a rail transportation project in California.
The severe winter also affected revenues in the quarter as it
impacted several projects in the northeastern U.S.
Barring Civil, which witnessed a 23% increase in revenues to $292
million, revenues declined across the other two segments. The
Building segment suffered the worst with a 31% decline to $311
million, followed by Specialty Contractors with a 3% dip to $292
Cost of sales decreased 5% to $850 million from $892 million in the
year-ago quarter. Gross profit rose 5% year over year to $105
million. Gross margin improved 90 basis points (bps) to 11%.
General and administrative expenses decreased 1% year over year to
$64 million. Operating profit was $41 million, up 15% from $36
million in the year-ago quarter. Operating margin was 4.3%, a 70
basis-point improvement from 3.6% in the year-ago quarter.
As of Mar 31, 2014, cash and cash equivalents were $133 million
versus $120 million as of Dec 31, 2013. Cash used in operating
activities was $41 million in the reported quarter compared with
the prior-year quarter usage of $84 million. Cash usage in the
first quarter was due to the timing of payments primarily in the
Civil and Building segments.
Long-term debt, excluding the current portion, amounted to $698
million as of Mar 31, 2014, compared with $619 million as of Dec
31, 2013. The debt-to-capitalization ratio was at 39% as of Mar 31,
2014 compared with 37% as of Dec 31, 2013.
Backlog and Pending Orders
Total backlog as of Mar 31, 2014, was $7.7 billion, up 38% year
over year. In the quarter, additions to backlog worth mentioning
were ??? 2 New York MTA East Side Access projects valued at $844
million, a $113 million technology building project in California,
a $92 million I-564 Intermodal Connector design-build project in
Virginia, and a $74 million wastewater treatment project in New
Tutor Perini maintained its earnings per share guidance range of
$2.20 to $2.40 in 2014 and revenues guidance in the range of
Tutor Perini will benefit from the strong backlog which is
currently at the highest level since 2008. The company continues to
win contracts and has the prospects of winning future awards, given
its significant volume of pending awards. Building segments and
margins are also expected to grow over the next year, driven
primarily by the additional phases of the Hudson Yards projects.
Sylmar, CA-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
Tutor Perini currently retains a Zacks Rank #3 (hold). A
better-ranked stock in the building and heavy construction industry
worth considering is
EMCOR Group Inc.
) with a Zacks Rank #2 (Buy).
One of Tutor Perini's peers,
Chicago Bridge & Iron Company N.V.
) posted first-quarter adjusted earnings of 87 cents per share,
22.3% below the Zacks Consensus Estimate of $1.12 per share.
Adjusted net income, however, improved 12% year over year on the
back of strong project activities during the quarter.
Primoris Services Corporation
) reported first quarter earnings of 21 cents, up 11% year over
year and a penny ahead of the Zacks Consensus Estimate.
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