Yahoo Finance Tutor Perini Corp (TPC) Q1 2024 Earnings Call Transcript Highlights: Strong Turnaround with ...
Revenue: $1.05 billion, up 35% year-over-year.
Net Income: $16 million, compared to a net loss of $49 million in the previous year.
Earnings Per Share (EPS): $0.30 diluted, with guidance for 2024 in the range of $0.85 to $1.10.
Operating Cash Flow: $98 million, the second highest for a first quarter since 2008.
Backlog: Increased 26% year-over-year to $10 billion.
Debt Reduction: Total debt down by $99 million or 11% from the previous quarter; further reduction of $100 million expected with upcoming senior notes redemption.
Operating Margins: 15% for Civil segment and 3.9% for Building segment.
Segment Revenue: Civil segment $472 million, up 35%; Building segment $412 million, up 79%; Specialty Contractors segment $165 million, down 16%.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Ron, you mentioned a number of these are large prospects you were rebidding. Can you talk a little bit about historically what is your success rate in winning those rebids when you had already won sort of the first round? A: Ronald N. Tutor - Tutor Perini Corporation - Chairman & CEO: Well, those happen so seldom. I can't give you a long history, but let's just say we're very confident on the rebids with the lack of competition and the limited competitors.
Q: And then as it relates to -- this is more for Ryan. Ryan, the Civil margins in the first quarter were very strong. You mentioned a number of things on the call here, but can you kind of just identify the onetime items that might have influenced the strength in the first quarter? A: Ryan Joseph Soroka - Tutor Perini Corporation - Senior VP & CFO: Sure. The -- as I mentioned, and we have disclosed them Form 10-Q as well. There was a $10 million favorable impact to the first quarter related to a resolution on a Civil segment project here in L.A.
Q: Excellent. And then can you help us a little bit with regards to interest expense guidance for the second quarter and for the full year? A: Ryan Joseph Soroka - Tutor Perini Corporation - Senior VP & CFO: Yes. At this point, we're continuing to maintain our guidance for the year related to interest expense, but the refinancing will be less debt outstanding but also at a different rate.
Q: Nice to see the first quarter profitability there. Just to follow up on Alex's question on the Civil segment. If you back out the $10 million, you're just a hair under 13% margins in the first quarter in that business. So I guess I'm just kind of curious how we think about the go-forward there. Is the backlog that you have today kind of supportive on an underlying basis of that level of margin? Or is it still going to kind of fluctuate around within a fairly wide range over the next few quarters? A: Gary G. Smalley - Tutor Perini Corporation - President: Steve, this is Gary. Yes. Look, the nearly 13%, that's pretty much what we're expecting for the rest of the year. Historically, we've been in the 8% to 12% band, and we've been signaling for a while that we're going to be north of the 12%. The work that we have in backlog, we like the quality of earnings in that work. There's a lot of strong margin work there. So I think that's a pretty good proxy of how the rest of the year should play out.
Q: This is Ethan Kalis on for Abe Landa. I guess, just first off, congrats on getting the refinancing done. That's terrific. Our first question kind of focuses on CIE. I think in the past, you provided a 10% to 12% number of sales. That number is super helpful. I guess what's the right way to think about what normalized CIE is? Is it percentage of sales or maybe a percentage of backlog? Any color there would be helpful. A: Ronald N. Tutor - Tutor Perini Corporation - Chairman & CEO: Well, I've quoted in the past that I think a company of our size, assuming $5 billion to $6 billion in revenue, is going to generate anywhere from 5% to 7%, and you can expect $300 million to $400 million of CIE in various stages of disputes being resolved but should reside in that category. And that's our goal sometime in 2000 -- by the end of '25, no earlier than the first quarter of '26 to get well within that range and with any good fortune and no further delays in litigation by the first quarter of '25.
Q: Awesome. That's super helpful. And I guess just turning to the liability side. Is there a normalized level for the billings in excess? A: Ronald N. Tutor - Tutor Perini Corporation - Chairman & CEO: Whatever we can.Ryan Joseph Soroka - Tutor Perini Corporation - Senior VP & CFO: So just kind of looking forward, we've been targeting something in the mid-teens, just based on the types of projects that we're bidding and the focus on these large fixed-price projects.Ronald N. Tutor - Tutor Perini Corporation - Chairman & CEO: Essentially, what we do, we've taken a position with all our owners in an absolute mode in prebid discussion so that we change contracts. We tell them we don't finance our work they do. So we demand and get mobilization payments, which means on a typical $1 billion job, if we demand 8% to 10% upfront, it means they pay us $80 million to $100 million the day we set foot on the job and their money finances the job, not ours.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
