• Operating Cash Flow: $504 million for 2024, up 63% from $308 million in 2023.
• Debt Reduction: Total debt reduced by $477 million or 52% since the end of 2023.
• Revenue: $4.3 billion in 2024, a 12% increase from $3.9 billion in 2023.
• Net Loss: $164 million or a loss of $3.13 per share for 2024, compared to a net loss of $171 million or $3.30 per share in 2023.
• Backlog: Record backlog of $18.7 billion, an 84% increase year-over-year.
• Book-to-Burn Ratio: 5.4 times for Q4 2024, 3 times for the full year.
• Fourth Quarter Revenue: $1.1 billion, up 5% from $1 billion in Q4 2023.
• Interest Expense: Expected to be approximately $55 million in 2025, down from $89 million in 2024.
• G&A Expense: $110 million in 2024, up from $75 million in 2023.
• Effective Tax Rate: 29.3% in 2024, compared to 30.1% in 2023.
• 2025 EPS Guidance: Expected range of $1.50 to $1.90.

• Warning! GuruFocus has detected 3 Warning Signs with TPC.

Release Date: February 27, 2025

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 $18.7 billion, representing an 84% year-over-year growth.
• The company generated a record operating cash flow of $504 million in 2024, marking the third consecutive year of record cash flow.
• TPC significantly reduced its total debt by 52% since the end of 2023, enhancing its financial flexibility.
• The company anticipates a return to profitability in 2025 with projected EPS between $1.50 and $1.90, alongside double-digit revenue growth.
• TPC's new awards and contract adjustments totaled $12.8 billion in 2024, including major projects like the Manhattan Jail project and the City Center Guideway and Stations project.

Negative Points

• Tutor Perini Corp (NYSE:TPC) reported a net loss of $164 million for 2024, slightly improved from a $171 million loss in 2023.
• The company's operating income was negatively impacted by $347 million due to adverse legal judgments and settlements of legacy disputes.
• TPC's building segment posted a loss from construction operations of $24 million in 2024, although improved from a $91 million loss in 2023.
• The specialty contractor segment also reported a loss of $103 million in 2024, despite some improvement from the previous year.
• Corporate G&A expenses increased to $110 million in 2024, primarily due to higher compensation-related expenses linked to share-based compensation.

Q & A Highlights

Q: Can you provide more details on how the revenue and earnings will be distributed throughout the year, given that you mentioned it will be more back-half weighted than usual? A: Gary Smalley, CEO and President, explained that revenue is expected to grow quarter over quarter. Earnings will be lower in the first quarter due to seasonality, with single-digit EPS expected. There will be substantial improvement in the second quarter, with further gains in Q3 and Q4 as new projects ramp up and weather improves. Approximately two-thirds of EPS is anticipated in the second half of the year.

Q: How many legacy claims are left, and do you expect most of them to be resolved in 2025? A: Ronald Tutor, Executive Chairman, stated that about 12 to 14 legacy claims remain, with 75%-80% expected to be resolved in 2025. This has been factored into the earnings projections for the year, with appropriate contingencies established to protect earnings.

Q: Can you discuss capital allocation given the improved balance sheet? A: Gary Smalley mentioned that while it's early to provide detailed plans, capital allocation is a priority. As excess cash is generated, more details will be shared after discussions with the board. Ronald Tutor added that capital expenditures are funded by project contracts, not affecting cash flow.

Q: How much of the 2025 revenue and profits are already in the current backlog? A: Gary Smalley noted that the situation is similar to past years, with most revenue and profits for 2025 already in the backlog. Ronald Tutor emphasized that the large backlog means projections rely on contracted work, with limited new work anticipated.

Q: Are the terms and conditions of upcoming projects better than those booked recently? A: Gary Smalley stated that with a large backlog, the company can be more selective. Recent bookings have better contractual terms, and while future terms may not improve significantly, they are already favorable.

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