Tetra Tech (TTEK) Beats on Q3 Earnings, Raises 2024 Guidance

Core Viewpoint - Tetra Tech, Inc. reported strong financial performance for the third quarter of fiscal 2024, with adjusted earnings and revenues exceeding expectations, driven by robust growth across all segments [1][2]. Revenue & Segmental Performance - Tetra Tech generated revenues of $1.34 billion, reflecting an 11% year-over-year increase, and adjusted net revenues were $1.11 billion, up 12% year over year [2] - The backlog at the end of the fiscal third quarter was $5.23 billion, representing a 19% increase year over year [2] - Revenues from U.S. Federal customers increased by 34% year over year, while U.S. Commercial sales rose by 7% [3] - U.S. State and Local sales increased by 8% year over year, and international sales were up 5% [4] - The Government Services Group segment reported net sales of $488 million, up 25% year over year, while the Commercial/International Services Group segment totaled $621 million, representing a 4% increase [4] Margin Profile - Tetra Tech's operating income increased by 32% year over year to $129 million, with an adjusted margin rising by 150 basis points to 11.6% [5] Balance Sheet and Cash Flow - At the end of the fiscal third quarter, Tetra Tech had cash and cash equivalents of $212.3 million, up from $168.8 million at the end of the previous fiscal year [6] - Long-term debt decreased to $861.8 million from $879.5 million [6] - In the first nine months of fiscal 2024, net cash generated from operating activities was $253.1 million, compared to $246.1 million in the prior year [7] Shareholder-Friendly Policies - Tetra Tech distributed dividends totaling $43.3 million in the first nine months of fiscal 2024, an increase from $38.3 million in the same period last year [8] - The company repurchased shares worth $12.9 million during the same period [8] Fiscal 2024 Outlook Raised - For fiscal 2024, Tetra Tech anticipates net revenues in the range of $4.27-$4.32 billion, an increase from the previous guidance of $4.21-$4.31 billion [9] - Adjusted earnings are projected to be $6.23-$6.28 per share, up from the earlier estimate of $6.15-$6.25 [9] - For the fiscal fourth quarter, net revenues are estimated to be between $1.09-$1.14 billion, with adjusted earnings projected at $1.82-$1.87 per share [9]