Tutor Perini(US:TPC)2023-11-10 05:52Financial Data and Key Metrics Changes - The company reported a consolidated pre-tax loss of $26 million for Q3 2023, resulting in a loss of $0.71 per diluted share, compared to a loss of $32 million or $0.63 per share in Q3 2022 [9][31] - Operating cash flow for Q3 2023 was $103 million, bringing year-to-date operating cash flow to $181 million, which is just $26 million short of the record $207 million achieved last year [16][48] - The company expects full-year operating cash flow for 2023 to significantly exceed last year's record due to ongoing dispute resolutions and cash collections [60] Business Line Data and Key Metrics Changes - Civil segment revenue was $520 million, showing a modest increase compared to Q3 2022, while building segment revenue was $365 million, up 15% primarily due to increased project execution activities in California [25] - Specialty contractors segment revenue was $175 million, down 31% year-over-year, attributed to decreased activities on nearing completion projects in the Northeast [50] - Building segment income from construction operations was $47 million, more than double the $23 million reported in Q3 2022, due to an improved project mix [51] Market Data and Key Metrics Changes - The company's backlog stood at $10.6 billion, steady compared to Q2 2023 and up 28% from $8.4 billion in Q3 2022, driven by significant project awards [19] - The bidding pipeline remains strong, with several large projects anticipated, including the $500 million Amtrak Connecticut River Bridge replacement and the $1.5 billion Inglewood Automated People Mover Project [10][11] Company Strategy and Development Direction - The company plans to use excess cash generated to de-lever its balance sheet as part of a refinancing strategy expected to commence early next year [8][32] - Management expressed confidence in winning a share of upcoming projects due to diminished competition and strong market demand, particularly from the bipartisan infrastructure law [21] Management's Comments on Operating Environment and Future Outlook - Management noted mixed results for Q3 2023, highlighting strong cash generation and backlog growth but challenged earnings due to write-downs from disputed matters [16][34] - The company anticipates improved performance in Q4 2023 and expects significantly improved EPS in 2024 and beyond [35][47] Other Important Information - Corporate G&A expense for Q3 2023 was $21 million, up from $17 million in the same quarter last year [30] - Interest expense for Q3 2023 was $20 million, compared to $17 million in Q3 2022, driven by higher borrowing rates [55] Q&A Session Summary Question: Can you clarify the underlying operations from the charges related to settlement? - Management indicated that charges were a mix of ongoing and completed projects, with significant charges related to a completed tunnel project in Los Angeles [63][64] Question: What are the expected margins in backlog? - Management provided a conservative estimate of 10-12% for civil, 2-3% for building, and 4-5% for specialty contractors, with expectations of stabilization in margins moving forward [71][90] Question: When will the dispute settlements be resolved? - Management expressed confidence that most disputes would be resolved by the end of 2024, with ongoing collections expected to follow [75][86]