Tutor Perini Corporation’s TPC earnings plunged nearly 67.8% to 18 cents per share in the fourth quarter of 2015 from 56 cents reported in the year-ago quarter. Earnings also lagged the Zacks Consensus Estimate of 27 cents.
Tutor Perini posted revenues of $1.2 billion in the quarter, flat year over year. However, the figure fell short of the Zacks Consensus Estimate of $1.29 billion.
For full year 2015, the company reported adjusted earnings per share of $1.19, down 46% year over year. Earnings outpaced the Zacks Consensus Estimate of $1.15 per share. Including one-time items, the bottom line came in at 91 cents per share, down from $2.20 recorded in 2014.
Revenues grew 8.9% year over year to $4.9 billion from $4.5 billion in 2014. The revenue growth was driven by significantly increased volume in the Civil and Building segments. Revenues however missed the Zacks Consensus Estimate of $5.01 billion.
Despite disappointing fourth quarter earnings, shares of Tutor Perini gained nearly 10% since reporting its results on Feb 29. This was driven by an upbeat earnings guidance for 2016 which reflects year-over-year growth of 72% at the mid point of the range.
Operational Update
The Building segment’s revenues in the fourth quarter rose to $440.8 million, up 1.8% from the year-ago period. The Civil segment reported a 13% year-over-year rise in revenues to $477 million, while Specialty Contractors posted a 14.6% decline to $282.8 million from $331.3 million reported in the year-ago quarter.
Cost of sales went up 5.8% year over year to $1.13 billion. Gross profit declined 48.6% year over year to $66.7 million. Gross margin contracted 450 basis points (bps) to 5.5%.
General and administrative expenses decreased 21.6% year over year to $51.2 million. Operating profit was $15.5 million, compared with $64.4 million reported in the year-ago quarter. Operating margin fell 410 bps year over year to 1.3% in the quarter.
Financial Updates
Tutor Perini ended 2015 with cash and cash equivalents of $75.4 million compared with $135.6 million at 2014-end. The company delivered cash flow from operations of $14 million in 2015, compared with cash usage of $56.7 million in 2014. Long-term debt, excluding the current portion, was $734 million as of Dec 31, 2015 compared with $784 million as of Dec 31, 2014.
Backlog and Pending Orders
Total backlog on Dec 31, 2015 was $7.5 billion, reflecting a 3.8% decline from $7.8 billion reported at the end of 2014. New awards and adjustments to contracts in process totaled approximately $4.6 billion in 2015.
Outlook
Tutor Perini guided revenue outlook in the range of $5.1–$5.6 billion for 2016. The company provided earnings guidance of $1.90–$2.20 per share for the year.
Sylmar, CA-based Tutor Perini Corporation is a leading civil and building construction company that offers diversified general contracting and design-build services to private clients and public agencies globally.
Tutor Perini currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the sector include Watsco Inc. WSO, James Hardie Industries plc JHX and NCI Building Systems Inc. NCS. All these stocks carry a Zacks Rank #2 (Buy).
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