• Backlog: Reached $14 billion, up 35% compared to the prior quarter.
• Operating Cash Flow: Year-to-date $174 million; expected full-year 2024 range of $425 million to $575 million.
• Revenue: $1.1 billion for Q3 2024, up slightly from the same quarter last year.
• Civil Segment Revenue: $546 million for Q3 2024, up 5% year-over-year.
• Building Segment Revenue: $436 million for Q3 2024, up 19% year-over-year.
• Specialty Contractor Segment Revenue: $101 million for Q3 2024, down substantially from the previous year.
• Net Loss: $101 million for Q3 2024, or a loss of $1.92 per share.
• Debt Reduction: Total debt as of September 30, 2024, is $681 million, down 24% from December 31, 2023.
• Interest Expense Savings: Expected annual savings of $15 million to $22 million starting in 2025.
• Dispute Resolutions Impact: Negatively impacted Q3 income by $152 million and EPS by $2.13.

• Warning! GuruFocus has detected 7 Warning Signs with TPC.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tutor Perini Corp (NYSE:TPC) achieved a record backlog of $14 billion, a 35% increase from the previous quarter.
• The company expects outstanding cash flow in the fourth quarter, potentially breaking last year's record and enabling debt prepayment.
• Several new high-value projects were awarded, including a $1.66 billion project in Honolulu and a $1.1 billion tunnel project in New York.
• The company anticipates significant revenue growth and profitability in 2025 and beyond due to higher-margin projects with improved contractual terms.
• Tutor Perini Corp (NYSE:TPC) plans to significantly reduce its debt, with expected interest expense savings of $15 million to $22 million annually starting in 2025.

Negative Points

• The third quarter was negatively impacted by $152 million in charges from dispute resolutions, affecting income and EPS.
• The company reported a net loss of $101 million for the third quarter of 2024, compared to a $37 million loss in the same quarter last year.
• Specialty contractor segment revenue decreased significantly due to reduced activities on various projects.
• The company withdrew its EPS guidance for 2024 due to adverse charges from dispute resolutions.
• Share-based compensation expenses increased due to a significant rise in stock price, impacting earnings volatility.

Q & A Highlights

Q: Can you talk about when the recent project awards will start contributing to revenues? A: Ronald Tutor, CEO: Major construction on these projects will begin between June and September of next year. Significant revenue impact will be seen in 2026, 2027, and 2028 as these are five-year projects with steady income streams.

Q: How will the specialty business earnings be affected by the recent project wins? A: Ronald Tutor, CEO: The specialty group will see revenue ramp up as most new projects have large components set aside for our specialty contractors. This should lead to significant margins and better performance compared to past years.

Q: How do the contracts for new projects differ from legacy projects? A: Ronald Tutor, CEO: New contracts have more favorable terms, including upfront mobilization payments, reduced retention, and better schedules. This shift is due to fewer bidders in the market, allowing us to negotiate terms that are fair and reasonable.

Q: What are the expected margin ranges for the new projects? A: Ronald Tutor, CEO: While specific bid profits are not disclosed, margins are expected to be significantly higher than in the past, particularly in the building and civil segments, with civil projects potentially achieving margins of 11% to 12%.

Q: What is the value potential of the remaining disputes? A: Ronald Tutor, CEO: The remaining disputes are valued between $450 million and $500 million, expected to be resolved by the end of next year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.