Tutor Perini(US:TPC)2023-08-04 21:59Financial Data and Key Metrics Changes - The company reported a consolidated revenue of just over $1 billion for Q2 2023, representing a 19% increase year-over-year, driven by contributions from civil segment mass transit projects in California [68][74] - Operating cash flow for Q2 2023 was $56 million, bringing the total for the first six months of 2023 to $78 million, the second highest since the merger in 2008 [39][49] - The net loss attributable to Tutor Perini for Q2 2023 was $38 million, or a loss of $0.72 per share, compared to a net loss of $62 million, or a loss of $1.23 per share in Q2 2022 [77] Business Line Data and Key Metrics Changes - The Civil segment revenue for Q2 2023 was $554 million, up 37% compared to the same quarter last year, primarily due to mass transit projects [74] - The Building segment revenue was $331 million, up 24%, while the Specialty Contractors segment revenue decreased by 28% to $136 million [50][74] - The Specialty Contractors segment posted a loss from construction operations of $70 million in Q2 2023, largely due to unfavorable non-cash adjustments [51] Market Data and Key Metrics Changes - The company's backlog increased to $10.9 billion, up 27% from $8.5 billion in the same quarter last year, driven by significant project awards [4][55] - The company anticipates strong demand for its services as substantial funding is expected to flow to public owners over the coming years [6] Company Strategy and Development Direction - The company is focused on growing its civil business, which is expected to drive future growth and profitability [6] - The bidding pipeline remains robust with numerous large project opportunities, including the $3 billion Queens facility and the $1.5 billion Inglewood people mover project [41][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in stronger cash generation in the second half of 2023, anticipating resolution of long-standing disputes and collection of significant cash [69] - The company does not plan to provide new guidance for 2023 due to various uncertainties related to dispute resolutions and litigation outcomes [72] Other Important Information - The effective tax rate for 2023 is now expected to be approximately 40% to 50%, down from previous estimates [54] - The company is prioritizing debt reduction and expects to continue reducing debt as cash collections improve [12] Q&A Session Summary Question: Were any recent awards funded by the IRA or other federal funding initiatives? - Management indicated that recent awards were not funded by the IRA, but they expect funding to gradually impact the market [57] Question: Can you provide an update on the litigation and claims? - Management expects that 90% of all claims will be adjudicated by the end of next year, with a significant amount of cash expected from settlements [16][95] Question: What is the status of the company's surety capacity? - The company has significant surety capacity, supported by a strong net worth and positive cash flows, despite challenges in New York [91] Question: What are the plans for the Specialty Contractors segment? - The Specialty Contractors segment has been reduced significantly and will only support the Civil group for the time being, with hopes of resolving issues and potentially growing again based on performance [99]