Financial Data and Key Metrics Changes - The company generated record operating cash flow of $504 million for the full year of 2024, up 63% from $308 million in 2023, marking the third consecutive year of record cash flow [22][46] - Total debt was reduced by $477 million or 52% since the end of 2023, with net debt at $79 million as of December 31, 2024, down 85% from $519 million at the end of 2023 [23][58] - The company reported a net loss of $164 million or a loss of $3.13 per share for 2024, compared to a net loss of $171 million or a loss of $3.30 per share in 2023 [54] Business Line Data and Key Metrics Changes - Civil segment revenue was $2.1 billion, up 12% from $1.9 billion in 2023, driven by increased project execution activities [48] - Building segment revenue increased by 24% to $1.6 billion from $1.3 billion, primarily due to health care and educational facility projects [48] - The Specialty Contractors segment posted a loss from construction operations of $103 million in 2024, an improvement from a $145 million loss in 2023 [52] Market Data and Key Metrics Changes - The company finished 2024 with a record backlog of $18.7 billion, growing 84% year-over-year, with a book-to-burn ratio of 5.4x for the fourth quarter [24][27] - New awards in 2024 included significant projects such as the $3.76 billion Manhattan Jail project and the $1.66 billion City Center Guideway project [28] Company Strategy and Development Direction - The company aims to return to profitability with EPS guidance for 2025 in the range of $1.50 to $1.90, expecting double-digit revenue growth [40] - A focus on cash generation and resolving legacy disputes is prioritized to enhance financial stability and operational performance [14][15] - The company is exploring technology investments, including artificial intelligence, to improve project planning and execution [17] Management's Comments on Operating Environment and Future Outlook - Management does not anticipate significant impacts from federal spending scrutiny or new tariffs on major projects [19] - The company expects to clear 75% to 80% of remaining legacy claims in 2025, which has been factored into earnings projections [74] - The outlook for 2026 and 2027 projects EPS to be more than double the 2025 guidance, driven by profitable backlog work [43] Other Important Information - Corporate G&A expenses increased to $110 million in 2024 from $75 million in 2023, primarily due to higher compensation-related expenses [53] - The effective income tax rate for 2025 is expected to be approximately 21% to 23% [60] Q&A Session Summary Question: Can you give us a little more help on how you see the cadence of the year playing out? - The company expects quarter-over-quarter revenue growth throughout the year, with a lower first quarter EPS due to seasonality, and significant improvements in the second half [70][72] Question: How many legacy claims are left and do you still think most of those are cleared up in 2025? - There are about 12 to 14 legacy claims remaining, with 75% to 80% expected to be resolved in 2025 [74] Question: Can you talk high level about capital allocation, given the much more flexible balance sheet? - The company is considering various options for capital allocation and will provide more details as they progress through the year [76]

Tutor Perini Corporation (NYSE:TPC) Q4 2024 Earnings Conference Call February 27, 2024 5:00 PM ET Company Participants Jorge Casado - VP, IR Ronald Tutor - Executive Chairman Gary Smalley - CEO President Ryan Soroka - EVP and CFO Conference Call Participants Adam Thalhimer - Thompson, Davis & Company Michael Dudas - Vertical Research Partners Operator Good day, ladies and gentlemen, and welcome to the Tutor Perini Corporation Fourth Quarter 2024 Earnings Conference Call. My name is Stacy and I will be your ...

Financial Performance - Consolidated revenue for 2024 was $4.3 billion, up 12% from $3.9 billion in 2023, driven by growth in the Building and Civil segments[113]. - Loss from construction operations decreased to $103.8 million in 2024 from $114.6 million in 2023, primarily due to a net increase in project execution activities totaling $93.2 million[115]. - The effective income tax rate for 2024 was 29.3%, a slight decrease from 30.1% in 2023[125]. - The company generated record cash flow from operations of $503.5 million in 2024, utilizing part of it to repay $245.3 million of Term Loan B debt[126]. - Net cash provided by operating activities for 2024 was $503.5 million, a 63% increase from $308.5 million in 2023, marking the highest cash flow since the 2008 merger[159]. Awards and Backlog - Consolidated new awards in 2024 reached $12.8 billion, significantly higher than $6.1 billion in 2023, with major projects including the $3.76 billion Manhattan Jail project[127]. - Consolidated backlog as of December 31, 2024, was $18.7 billion, an 84% increase from $10.2 billion at the end of 2023, setting a new all-time record[128]. - Approximately $4.5 billion, or 24% of the backlog as of December 31, 2024, is expected to be recognized as revenue in 2025[129]. - New awards in the Civil segment totaled $6.7 billion in 2024, significantly up from $1.7 billion in 2023[137]. - New awards in the Building segment reached $4.5 billion in 2024, compared to $3.3 billion in 2023[143]. - New awards in the Specialty Contractors segment totaled $1.7 billion in 2024, up from $1.1 billion in 2023[150]. Segment Performance - Civil segment revenue for 2024 was $2,118.9 million, a 12% increase from $1,883.9 million in 2023[133]. - Income from construction operations in the Civil segment decreased by $60.3 million to $138.3 million in 2024, primarily due to unfavorable adjustments related to arbitration decisions and legal rulings[134]. - Building segment revenue increased by 24% to $1,617.6 million in 2024, driven by healthcare and educational facility projects[140]. - Loss from construction operations in the Building segment improved to $24.1 million in 2024 from a loss of $91.2 million in 2023[141]. - Specialty Contractors segment revenue decreased by 15% to $590.4 million in 2024, mainly due to reduced project activities[147]. - Loss from construction operations in the Specialty Contractors segment improved to $103.3 million in 2024 from a loss of $144.8 million in 2023[148]. Cash and Debt Management - As of December 31, 2024, cash and cash equivalents increased to $455.1 million from $380.6 million in 2023, with cash available for corporate purposes rising to $265.6 million[158]. - The company utilized $245.3 million of its record cash flow in 2024 to repay outstanding Term Loan B, with an additional voluntary repayment of $121.9 million in Q1 2025[157]. - Working capital as of December 31, 2024, was $1.0 billion, with a current assets to current liabilities ratio of 1.41, down from 1.66 in 2023[164]. - Net cash used in investing activities in 2024 was $40.7 million, primarily for capital expenditures of $37.4 million, compared to $78.2 million in 2023[162]. - Net cash used in financing activities for 2024 was $393.3 million, driven by a $354.6 million net repayment of debt, including the redemption of 2017 Senior Notes[163]. - The company issued $400.0 million in 11.875% Senior Notes in April 2024, with interest payable semi-annually starting October 2024[166]. - The average borrowing rates for the Term Loan B and the Revolver in 2024 were approximately 10.0% and 11.8%, respectively[176]. - As of December 31, 2024, the company had an unused borrowing capacity of $170.0 million under the Revolver[174]. - The First Lien Net Leverage Ratio was (.56) to 1.00 as of December 31, 2024, well below the required maximum of 2.25:1.00[177]. - The company has debt obligations totaling $556.1 million, with $24.1 million due in 2025, and interest payments of $221.1 million, of which $53.4 million are due in 2025[180]. - The company reported operating lease obligations of $67.1 million, with $11.0 million due in 2025[180]. Financial Risks and Accounting Policies - The company conducted its annual goodwill impairment test in the fourth quarter of 2024 and determined that goodwill was not impaired, as the estimated fair value of the Civil reporting unit exceeded its net book value significantly[191]. - The company recognizes revenue for claims as variable consideration in accordance with ASC 606, with estimates based on anticipated performance and available information[182]. - The company evaluates joint ventures to determine if they qualify as variable interest entities (VIEs) and consolidates them if it is the primary beneficiary[185]. - The company has limited warranties for work performed, with warranty periods typically extending for a limited duration following substantial completion of projects[180]. - The company assesses its joint ventures at inception to determine if they meet the qualifications of a VIE, considering factors such as equity investment and voting rights[184]. - The company has made claims against customers for costs incurred in excess of current contract provisions, which are recognized as variable consideration[182].

Financial Performance - Tutor Perini generated record operating cash flow of $503.5 million in 2024, up 63% year-over-year, surpassing the previous record of $308.5 million set in 2023[4]. - Revenue for 2024 was $4.3 billion, reflecting a 12% increase year-over-year, driven by strong performance in Civil and Building segments[12]. - Revenue for Q4 2024 reached $1,067,649,000, a 4.5% increase from $1,021,471,000 in Q4 2023[26]. - Total revenue for the year ended December 31, 2024 was $4,326,922,000, up 11.5% from $3,880,227,000 in 2023[26]. - Gross profit for the year ended December 31, 2024 was $197,038,000, compared to $140,624,000 in 2023, reflecting a significant increase of 40%[26]. - The company reported a net loss of $163.7 million for 2024, translating to a diluted loss of $3.13 per share, compared to a net loss of $171.2 million, or $3.30 per share, in 2023[13]. - The net loss attributable to Tutor Perini Corporation for Q4 2024 was $79,431,000, compared to a net loss of $47,529,000 in Q4 2023, indicating a deterioration in performance[26]. - Basic loss per common share for Q4 2024 was $1.51, compared to $0.91 in Q4 2023, indicating a worsening loss per share[26]. - Net loss for 2024 was $122,339,000, slightly improved from a net loss of $127,597,000 in 2023[39]. Debt and Equity - The company reduced total debt by $477 million, or 52%, since the end of 2023, including the full payoff of its Term Loan B in early 2025[5]. - Total stockholders' equity decreased from $1,283,911,000 in 2023 to $1,158,606,000 in 2024, a decline of about 9.8%[36]. Backlog and Awards - Consolidated backlog reached a record $18.7 billion as of December 31, 2024, an increase of 84% compared to $10.2 billion at the end of 2023[6]. - New awards and contract adjustments totaled $12.8 billion in 2024, contributing to the record backlog[7]. - New awards in the backlog for the year ended December 31, 2024, amounted to $12,842,400,000, compared to $5,716,300,000 recognized in the previous year[41]. - The backlog at December 31, 2024, totaled $18,673,900,000, up from $10,158,400,000 at the end of 2023, indicating a substantial increase of approximately 83.8%[41]. Future Outlook - For 2025, the company anticipates double-digit revenue growth and expects earnings per share (EPS) in the range of $1.50 to $1.90[16]. - Preliminary estimates suggest significantly stronger earnings in 2026 and 2027, projected to be more than double the EPS guidance for 2025[17]. - Management emphasized that the record backlog and future bidding opportunities are expected to drive significant revenue growth and improved profitability in the coming years[11]. Segment Performance - The Civil segment generated revenue of $2,248,659,000 for the year ended December 31, 2024, compared to $1,971,194,000 in 2023, marking a growth of 14.1%[32]. - The Building segment reported a revenue of $1,666,862,000 for 2024, up from $1,302,636,000 in 2023, representing a growth of 28%[32]. - The Specialty Contractors segment experienced a revenue decrease to $590,822,000 in 2024 from $694,038,000 in 2023, a decline of 14.9%[32]. Cash Flow and Assets - Cash provided by operating activities increased significantly to $503,544,000 in 2024, compared to $308,471,000 in 2023, representing a growth of approximately 63.2%[39]. - Cash, cash equivalents, and restricted cash at the end of 2024 were $464,188,000, an increase from $394,680,000 at the end of 2023[39]. - Total assets decreased from $4,429,856,000 in 2023 to $4,242,710,000 in 2024, a decline of approximately 4.2%[36]. Capital Expenditures and Expenses - Capital expenditures for the year ended December 31, 2024 totaled $37,409,000, an increase from $52,953,000 in 2023[32]. - The company recognized a depreciation expense of $51,551,000 in 2024, up from $42,992,000 in 2023, reflecting an increase of approximately 19.0%[39]. - The company reported a loss from construction operations of $86,245,000 in Q4 2024, compared to a loss of $22,474,000 in Q4 2023[29]. - The company reported a significant increase in share-based compensation expense, rising to $40,356,000 in 2024 from $12,259,000 in 2023, an increase of approximately 229.5%[39].

Company Performance - Tutor Perini's stock closed at $24.61, reflecting a +1.32% increase from the previous day's closing price, outperforming the S&P 500's daily gain of 0.53% [1] - The stock has increased by 0.37% over the past month, which is better than the Construction sector's decline of 0.13% but lagging behind the S&P 500's gain of 1.24% [1] Upcoming Earnings - Tutor Perini is expected to report earnings of $0.30 per share, indicating a year-over-year growth of 132.97% [2] - The consensus estimate for revenue is projected at $1.09 billion, representing a 6.83% increase compared to the same quarter last year [2] Analyst Estimates - Recent changes to analyst estimates for Tutor Perini are being monitored, as positive revisions typically indicate analyst optimism regarding the company's business and profitability [3] - The Zacks Rank system, which reflects these estimate changes, suggests that stocks with positive revisions tend to perform better [4] Zacks Rank and Valuation - Tutor Perini currently holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate remaining unchanged over the past month [5] - The company has a Forward P/E ratio of 12.15, which is below the industry average of 16.8, indicating a valuation discount [6] Industry Context - Tutor Perini operates within the Building Products - Heavy Construction industry, which ranks in the bottom 32% of all industries according to the Zacks Industry Rank [6] - The Zacks Industry Rank suggests that the top 50% of rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on Tutor Perini (TPC), and highlights the potential misalignment of brokerage firms' interests with those of retail investors [1][4]. Group 1: Brokerage Recommendations - Tutor Perini has an average brokerage recommendation (ABR) of 1.00, indicating a Strong Buy based on three brokerage firms' recommendations, all of which are Strong Buy [2]. - The article suggests that relying solely on ABR for investment decisions may not be wise, as studies indicate that brokerage recommendations often fail to guide investors effectively [4][9]. Group 2: Analyst Bias and Performance - Brokerage analysts tend to exhibit a strong positive bias in their ratings due to vested interests, with a ratio of five "Strong Buy" recommendations for every "Strong Sell" [5][9]. - The Zacks Rank, a proprietary stock rating tool, is presented as a more reliable indicator of a stock's near-term price performance compared to ABR, as it is based on earnings estimate revisions [7][10]. Group 3: Zacks Rank vs. ABR - Zacks Rank and ABR are distinct measures; ABR is based solely on brokerage recommendations, while Zacks Rank incorporates earnings estimate revisions and is more timely in reflecting market conditions [8][11]. - Tutor Perini's Zacks Consensus Estimate for the current year remains unchanged at -$1.30, indicating steady analyst views on the company's earnings prospects [12]. Group 4: Investment Outlook - The Zacks Rank for Tutor Perini is 3 (Hold), suggesting caution despite the Buy-equivalent ABR [13].

Company Performance - Tutor Perini (TPC) closed at $24.31, with a +1.76% increase from the previous day, outperforming the S&P 500's daily gain of 0.12% [1] - The stock has decreased by 9.75% over the past month, underperforming the Construction sector's loss of 8.26% and the S&P 500's loss of 3.45% [1] Upcoming Earnings - Tutor Perini is expected to report earnings of $0.30 per share, indicating a year-over-year growth of 132.97% [2] - The Zacks Consensus Estimate for revenue is projected at $1.09 billion, reflecting a 6.83% increase from the previous year [2] Analyst Estimates - Recent changes to analyst estimates for Tutor Perini suggest a shifting business landscape, with positive revisions indicating optimism about the company's outlook [3] - The Zacks Rank system, which incorporates these estimate changes, provides a rating system for investors [4] Zacks Rank and Valuation - Tutor Perini currently holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate remaining steady over the past month [5] - The company is trading at a Forward P/E ratio of 11.94, which is below the industry average of 17.47, indicating a discount compared to its peers [6] Industry Context - The Building Products - Heavy Construction industry, part of the Construction sector, has a Zacks Industry Rank of 177, placing it in the bottom 30% of over 250 industries [6] - The Zacks Industry Rank measures the strength of industry groups based on the average Zacks Rank of individual stocks, with higher-ranked industries outperforming lower-ranked ones [7]

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Tutor Perini (TPC), and emphasizes the importance of using these recommendations in conjunction with other analytical tools like Zacks Rank for making informed investment decisions [1][4]. Group 1: Brokerage Recommendations - Tutor Perini currently has an average brokerage recommendation (ABR) of 1.00, indicating a Strong Buy, based on recommendations from three brokerage firms, all of which are Strong Buy [2]. - The vested interest of brokerage firms often leads to a positive bias in their analysts' ratings, with research indicating that for every "Strong Sell" recommendation, there are five "Strong Buy" recommendations [5][9]. Group 2: Zacks Rank Comparison - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, with a strong correlation to near-term stock price movements, making it a more reliable indicator than ABR [7][10]. - The Zacks Rank is updated more frequently than ABR, reflecting timely changes in earnings estimates, which enhances its predictive power for future stock prices [11]. Group 3: Current Performance of Tutor Perini - The Zacks Consensus Estimate for Tutor Perini has remained unchanged at -$1.30 over the past month, suggesting analysts' steady views on the company's earnings prospects [12]. - Due to the unchanged consensus estimate and other factors, Tutor Perini holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [13].

Group 1 - Tutor Perini (TPC) closed at $24.50, with a slight increase of +0.04% from the previous session, underperforming the S&P 500's daily gain of 0.16% [1] - Over the past month, Tutor Perini's shares have depreciated by 6.74%, outperforming the Construction sector's loss of 11.66% and lagging behind the S&P 500's loss of 2.8% [1] Group 2 - The upcoming earnings report for Tutor Perini is anticipated to show an EPS of $0.30, representing a significant increase of 132.97% from the same quarter last year [2] - Revenue is expected to reach $1.09 billion, indicating a 6.83% increase compared to the previous year [2] Group 3 - Changes in analyst estimates for Tutor Perini are crucial as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [3] - The Zacks Rank system, which evaluates these estimate changes, provides actionable ratings, with a current Zacks Rank of 3 (Hold) for Tutor Perini [5] Group 4 - Tutor Perini has a Forward P/E ratio of 12.24, which is a discount compared to the industry's average Forward P/E of 17.34 [6] - The Building Products - Heavy Construction industry, part of the Construction sector, holds a Zacks Industry Rank of 152, placing it in the bottom 40% of over 250 industries [6]

Core Viewpoint - Tutor Perini has experienced significant stock price appreciation in 2024, driven by strong demand in the construction sector, government infrastructure spending, and expectations of lower borrowing costs due to potential Fed rate cuts [2][3]. Company Performance - Tutor Perini's revenue grew by 14% year-to-date, reaching $3.26 billion, despite reporting losses primarily due to legal disputes [5]. - The company's backlog increased by 35% sequentially to $14 billion, surpassing the previous record of $11.6 billion set in 2019, indicating a recovery from earlier slowdowns [4][5]. - The company anticipates a return to profitability in 2025, with projected earnings growth in subsequent years [5]. Market Position - Tutor Perini's market capitalization stands at $1.3 billion, with a price-to-sales (P/S) ratio of 0.3, suggesting potential leverage if the company meets its profit expectations [6]. - The stock price surged by 10% following the Q3 earnings report, reflecting investor satisfaction with the backlog increase [6]. Future Outlook - The Wall Street consensus projects adjusted earnings per share of $1.92 for 2025, resulting in a forward price-to-earnings (P/E) ratio of 12.8, which is favorable for a cyclical stock [6]. - The company has secured several significant projects, including a $1.66 billion mass-transit project in Hawaii and a $1.1 billion water conveyance tunnel in New York, contributing to a backlog equivalent to approximately 3.5 years of revenue [5]. - Continued growth in the backlog is expected into 2025, contingent on a stable economy and resolution of legal disputes [6].