Tutor Perini sees negative Q3 EPS, withdraws 2024 EPS guidance

Tutor Perini (TPC) provided an update regarding several recent developments, including the settlement of various project-related disputes, which had both favorable and adverse implications for the company. Because of anticipated cash collections resulting from these settlements and from other unrelated project activities, some of which are driven by new awards, the company expects that its operating cash flow for 2024 will be in the range of $425 million to $575 million, meaningfully surpassing the Company’s previous record for full-year operating cash generation in 2023 and significantly greater than previous estimates. The company expects to use this anticipated cash, in part, to prepay its Term Loan B debt by $100 million to $150 million by the end of 2024, with further prepayments of $50 million to $75 million in the first quarter of 2025. Significant new award activity is expected to result in a new record ending backlog of approximately $14 billion as of September 30, 2024, up 35% compared to the backlog reported as of June 30, 2024. The Company continues to expect strong new award bookings in the near term, as it has recently submitted proposals and is awaiting owners’ decisions and potential awards for several other large projects. Accordingly, ending backlog for the fourth quarter of 2024 could see further significant growth compared to the result to be reported for the third quarter of 2024. As a result of the net charges discussed below, the company expects that it will report a loss from construction operations and negative earnings per share for the third quarter of 2024. Therefore, the company is withdrawing its EPS guidance for 2024. The company does not expect these net charges to affect compliance with its debt covenants. Excluding the impact of these net charges, the company believes that the third-quarter results would have been profitable, and it would have been in a position to achieve its previously provided EPS guidance range. The company expects to return to profitability in 2025 and will provide guidance for 2025 in February, when it reports its full-year 2024 results.