Tetra Tech Inc. (TTEK) recently received a contract from Cameco Corporation, one of the world’s largest uranium producers, to be a part of its “Vision in Motion” project. Tetra Tech’s scope of work involves completion of a feasibility study for a major remediation project in Port Hope, Ontario, Canada. The value of the feasibility study was not yet disclosed.
The Vision in Motion program is designed for the upgradation of Cameco’s Port Hope Conversion Facility. New buildings will be constructed in place of old ones and under-utilized buildings as well as contaminated soil and stored wastes will be removed. Tetra Tech may receive an engineering-procurement-construction management (EPCM) contract for the remediation and construction phase from Cameco after the successful completion of the feasibility study. The feasibility study is expected to be completed in the fall of 2012, with EPCM implementation to be started in 2013.
Tetra Tech is an expert in water resources and front-end environmental permitting for oil and gas projects. The addition of pipeline planning and engineering expert, REI, is a strategic fit for Tetra Tech. The combination allows Tetra Tech to provide complete range of services to the rapidly growing shale oil market.
The company is also performing well in its international market, benefiting from the rising demand for water related services. Good returns from the US as well as international markets led the company to increase its revenue guidance for fiscal 2012. However, impact of a weak economic condition remains a matter of concern. A major portion of Tetra Tech’s revenue is derived from the U.S. federal government agencies as such delay in budgets would have amaterial impact on revenue.
Tetra Tech Inc. is a leading provider of consulting, engineering, program management, construction and technical services focusing on resource management and infrastructure. It serves clients by providing cost-effective and innovative solutions to fundamental needs like water, environmental and alternative energy services.
We currently maintain our Neutral rating on Tetra Tech Inc. with a Zacks #2 Rank (short-term Buy recommendation) over the next one-to-three months.
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