Tutor Perini ((TPC)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Tutor Perini presented a mixed sentiment, highlighting both significant achievements and ongoing challenges. While the company reported impressive gains in cash generation, debt reduction, and backlog growth, these were counterbalanced by the negative impacts of legacy dispute resolutions, operating losses, and increased general and administrative (G&A) expenses. Despite these hurdles, there is optimism for future profitability and growth, although current financial performance remains affected by existing challenges.
Record Cash Generation
Tutor Perini achieved a remarkable milestone in cash generation, producing $330 million in the fourth quarter alone and $504 million for the entire year of 2024. This achievement shattered the previous year’s record by approximately $200 million, showcasing the company’s strong cash flow capabilities.
Debt Reduction
The company made significant strides in reducing its total debt by $477 million, or 52%, since the end of 2023. This includes the complete payoff of the Term Loan B, reflecting Tutor Perini’s commitment to strengthening its financial position.
Record Backlog
Tutor Perini closed 2024 with a new all-time record backlog of $18.7 billion, marking an 84% year-over-year increase. This growth was driven by $12.8 billion in new awards and contract adjustments, providing a solid foundation for future revenue.
Double-Digit Revenue Growth
The company reported a 12% revenue growth in 2024, with expectations for even more significant growth in the coming years. This performance underscores Tutor Perini’s ability to expand its business despite current challenges.
Legacy Dispute Resolutions Impact
Operating income in 2024 was adversely affected by a net total of $347 million due to various unfavorable legal judgments and decisions. These legacy disputes have been a significant drag on profitability.
Operating Loss
Tutor Perini reported a loss from construction operations of $104 million in 2024, compared to a $115 million loss in 2023. The net loss attributable to the company for 2024 was $164 million, indicating ongoing financial challenges.
Higher G&A Expense
Corporate G&A expenses rose to $110 million in 2024 from $75 million in 2023, primarily due to increased compensation-related expenses. This rise in costs has further impacted the company’s financial performance.
Forward-Looking Guidance
Looking ahead, Tutor Perini anticipates a return to profitability in 2025, with an expected earnings per share (EPS) range of $1.50 to $1.90 and continued double-digit revenue growth. The company emphasized its record backlog of $18.7 billion, suggesting a robust platform for future earnings. Additionally, they plan to resolve several legacy disputes by 2025, which have previously impacted profitability, and expect strong cash flow driven by ongoing project operations and dispute resolutions.
In summary, Tutor Perini’s earnings call reflected a mixed sentiment, balancing significant achievements in cash generation and debt reduction with challenges from legacy disputes and increased expenses. The company remains optimistic about future growth and profitability, supported by a record backlog and strategic financial management.