Tutor Perini Corporation (TPC) Bundle
Understanding Tutor Perini Corporation (TPC) Revenue Streams
Understanding Tutor Perini Corporation’s Revenue Streams
As of September 30, 2024, Tutor Perini Corporation reported consolidated revenue of $3.26 billion, reflecting a year-over-year increase of 14% compared to $2.86 billion for the same period in 2023. This growth was driven by increased project execution activities across various segments, particularly in healthcare, education, and civil infrastructure projects.
Breakdown of Primary Revenue Sources
The revenue for the nine months ended September 30, 2024, can be categorized by business segment as follows:
| Segment | Revenue (in millions) | Percentage of Total Revenue |
|---|---|---|
| Civil | $1,649.4 | 50.5% |
| Building | $1,313.1 | 40.3% |
| Specialty Contractors | $429.2 | 13.2% |
| Total | $3,391.7 | 100% |
The Civil segment showed significant growth, with revenue increasing from $1.48 billion in the previous year, while the Building segment also saw a substantial rise from $926.4 million.
Year-over-Year Revenue Growth Rate
Historical revenue growth rates for Tutor Perini Corporation are as follows:
| Period | Revenue (in millions) | Growth Rate |
|---|---|---|
| Q3 2023 | $1,060.7 | - |
| Q3 2024 | $1,082.8 | 2.1% |
| 9M 2023 | $2,858.8 | - |
| 9M 2024 | $3,259.3 | 14% |
Contribution of Different Business Segments to Overall Revenue
For the nine months ended September 30, 2024, the contributions by segment were:
- Civil: $1,649.4 million
- Building: $1,313.1 million
- Specialty Contractors: $429.2 million
The Civil segment's revenue was bolstered by various mass-transit and water projects, while the Building segment's growth was attributed to healthcare and educational facility projects.
Analysis of Significant Changes in Revenue Streams
Notable changes in revenue streams include:
- Increased project execution activities in the Building segment, resulting in a 37% revenue increase year-over-year.
- New awards in the Civil segment totaling $4.2 billion for the nine months ended September 30, 2024, compared to $1.5 billion in 2023.
- Backlog for the Civil segment increased to $6.9 billion as of September 30, 2024, up 52% from $4.5 billion a year earlier.
Overall, the company's performance in 2024 reflects a strong recovery and growth trajectory, particularly within the Civil and Building segments.
A Deep Dive into Tutor Perini Corporation (TPC) Profitability
Profitability Metrics
Gross Profit
For the nine months ended September 30, 2024, the company reported a gross profit of $206.5 million, compared to a gross profit of $91.7 million for the same period in 2023. This reflects a significant increase in profitability despite the challenges faced during the year.
Operating Profit
The loss from construction operations for the nine months ended September 30, 2024, was ($17.5 million), a notable improvement from a loss of ($92.1 million) for the same period in 2023. The operating margin for the nine months ended September 30, 2024, was 1.4%, compared to (9.1%) for the same period in 2023.
Net Profit Margin
The net loss attributable to the company for the nine months ended September 30, 2024, was ($84.3 million), with a diluted loss per share of ($1.61). In comparison, for the same period in 2023, the net loss was ($123.6 million), with a diluted loss per share of ($2.39).
| Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Gross Profit | $206.5 million | $91.7 million |
| Operating Loss | ($17.5 million) | ($92.1 million) |
| Net Loss | ($84.3 million) | ($123.6 million) |
| Diluted Loss per Share | ($1.61) | ($2.39) |
Trends in Profitability Over Time
Over the past year, profitability metrics have shown a positive trend. The gross profit margin increased significantly, indicating better cost management and project execution. The improvement in operating losses further reflects enhanced operational efficiency. The overall financial performance demonstrates a recovery path, as reflected in the reduced net losses compared to the previous year.
Comparison of Profitability Ratios with Industry Averages
The company's operating margin of 1.4% for the nine months ended September 30, 2024, is below the industry average of approximately 5.0% for construction firms. The net profit margin, while negative, shows improvement compared to the industry average of 2.0%. This indicates that the company is still working towards achieving profitability levels that align with industry standards.
Analysis of Operational Efficiency
Operational efficiency remains a critical focus area. The gross profit margin for the nine months ended September 30, 2024, was 6.3%, an increase from 3.2% in 2023. This improvement is attributed to effective cost management strategies and increased project execution efficiency, particularly in the Civil and Building segments. General and administrative expenses rose to $224 million in 2024, up from $183.8 million in 2023, indicating a need for ongoing scrutiny of operational costs.
Operational Metrics Overview
| Operational Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Gross Profit Margin | 6.3% | 3.2% |
| General and Administrative Expenses | $224 million | $183.8 million |
Debt vs. Equity: How Tutor Perini Corporation (TPC) Finances Its Growth
Debt vs. Equity: How Tutor Perini Corporation Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, Tutor Perini Corporation reported total debt of $681.4 million, a decrease from $899.7 million at the end of 2023. This debt is comprised of:
- 2024 Senior Notes: $377.1 million
- Term Loan B: $265.8 million
- Equipment financing and mortgages: $28.1 million
- Other indebtedness: $10.5 million
Current maturities of long-term debt stood at $25.7 million as of September 30, 2024, compared to $117.4 million at the end of 2023.
Debt-to-Equity Ratio and Comparison to Industry Standards
The company's debt-to-equity ratio was 0.55 as of September 30, 2024, down from 0.70 at the end of 2023. This ratio indicates a moderate level of leverage, which is below the industry average of approximately 0.80 for similar firms in the construction and engineering sector.
Recent Debt Issuances and Refinancing Activity
On April 22, 2024, Tutor Perini issued $400 million in 11.875% Senior Notes due April 30, 2029. The proceeds from this issuance were used to redeem the 2017 Senior Notes totaling $500 million on May 2, 2024. The company also made a $91 million principal prepayment on Term Loan B during the same period.
Credit Ratings
The company maintains a credit rating of B3 from Moody's, indicating a higher risk of default compared to investment-grade rated companies. This rating reflects the company's operational challenges and financial performance.
Balancing Debt Financing and Equity Funding
Tutor Perini has effectively balanced debt and equity to fund its operations and growth. As of September 30, 2024, total equity was reported at $1.23 billion, showing a decline from $1.28 billion at the end of 2023. The company has utilized equity financing through common stock issuances, which generated $5.6 million in additional paid-in capital during the first nine months of 2024.
| Debt Type | Amount (in millions) |
|---|---|
| 2024 Senior Notes | $377.1 |
| Term Loan B | $265.8 |
| Equipment Financing and Mortgages | $28.1 |
| Other Indebtedness | $10.5 |
| Total Debt | $681.4 |
Assessing Tutor Perini Corporation (TPC) Liquidity
Assessing Tutor Perini Corporation's Liquidity
Current Ratio: As of September 30, 2024, the current ratio was 1.55, down from 1.66 at December 31, 2023.
Quick Ratio: The quick ratio for the same period is not explicitly stated but can be inferred from the current assets and liabilities.
Working Capital: The working capital as of September 30, 2024, was $1.2 billion, compared to $1.4 billion at December 31, 2023.
Cash and Cash Equivalents: Cash and cash equivalents were $287.4 million as of September 30, 2024, down from $380.6 million at December 31, 2023.
| Financial Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Current Ratio | 1.55 | 1.66 |
| Working Capital | $1.2 billion | $1.4 billion |
| Cash and Cash Equivalents | $287.4 million | $380.6 million |
Analysis of Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash provided by operating activities was $174.0 million, a decrease from $180.8 million in the same period of 2023.
Investing Cash Flow: Net cash used in investing activities during the first nine months of 2024 was $27.3 million, compared to $43.4 million in 2023.
Financing Cash Flow: Net cash used in financing activities was $240.0 million for the first nine months of 2024, up from $79.3 million in 2023.
| Cash Flow Type | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Operating Cash Flow | $174.0 million | $180.8 million |
| Investing Cash Flow | ($27.3 million) | ($43.4 million) |
| Financing Cash Flow | ($240.0 million) | ($79.3 million) |
Potential Liquidity Concerns or Strengths
The company has a committed line of credit totaling $170.0 million, which can be utilized for various purposes. Cash flow from operations is projected to be in the range of $250 million to $400 million for the fourth quarter of 2024, contributing to liquidity strength. Additionally, the company plans to prepay $100 million to $150 million of outstanding Term Loan B debt by the end of 2024.
As of September 30, 2024, the total debt was reported at $681.4 million, down from $899.7 million at December 31, 2023, indicating an improvement in the debt position.
| Debt Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt | $681.4 million | $899.7 million |
| Debt to Equity Ratio | 0.55 | 0.70 |
Is Tutor Perini Corporation (TPC) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we analyze key financial ratios, stock price trends, dividends, and analyst sentiments.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a critical metric for evaluating the valuation of a company. As of September 30, 2024, the diluted loss per common share was $(1.92), indicating a negative P/E ratio, which typically suggests that the company is experiencing losses rather than profits.
Price-to-Book (P/B) Ratio
The P/B ratio helps investors evaluate whether a stock is undervalued or overvalued compared to its book value. As of September 30, 2024, the total equity was $1.23 billion and the total assets were $1.66 billion. Assuming a stock price of approximately $8.00 per share, the P/B ratio can be calculated as follows:
- Shares Outstanding: 52.4 million
- Market Capitalization: $419.2 million (52.4 million shares $8.00)
- Book Value per Share: $23.44 ($1.23 billion / 52.4 million shares)
- P/B Ratio: 0.35 ($8.00 / $23.44)
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is another important valuation metric. As of September 30, 2024, the EBITDA for the nine months was $206.5 million. The enterprise value can be calculated as follows:
- Market Capitalization: $419.2 million
- Total Debt: $681.4 million
- Cash and Cash Equivalents: $287.4 million
- Enterprise Value: $813.2 million ($419.2 million + $681.4 million - $287.4 million)
- EV/EBITDA Ratio: 3.93 ($813.2 million / $206.5 million)
Stock Price Trends
Over the past 12 months, the stock price has shown volatility with the following key data points:
- 12-Month High: $12.50
- 12-Month Low: $6.15
- Current Price (as of October 2024): $8.00
Dividend Yield and Payout Ratios
The company has not declared dividends in the recent past, indicating a dividend yield of 0%. The lack of dividends reflects the company’s focus on reinvesting in operations rather than returning capital to shareholders.
Analyst Consensus on Stock Valuation
As of October 2024, analyst ratings are as follows:
- Buy: 2
- Hold: 5
- Sell: 1
Summary Table of Key Financial Ratios
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Loss) |
| P/B Ratio | 0.35 |
| EV/EBITDA Ratio | 3.93 |
| 12-Month High | $12.50 |
| 12-Month Low | $6.15 |
| Current Stock Price | $8.00 |
| Dividend Yield | 0% |
| Analyst Consensus (Buy/Hold/Sell) | 2/5/1 |
Key Risks Facing Tutor Perini Corporation (TPC)
Key Risks Facing Tutor Perini Corporation
Understanding the risk factors impacting Tutor Perini Corporation is crucial for investors. The company faces a variety of internal and external risks that can affect its financial health.
Industry Competition
The construction industry is highly competitive. As of September 30, 2024, Tutor Perini Corporation had a consolidated backlog of $14.0 billion, a 38% increase from $10.2 billion as of December 31, 2023. However, increased competition may lead to reduced margins on contracts.
Regulatory Changes
Changes in regulations, particularly in environmental standards and labor laws, can pose significant risks. The company reported that public health crises, such as COVID-19, have already adversely impacted its business by delaying project bids and awards.
Market Conditions
Market conditions, including fluctuations in material costs and labor availability, can impact project profitability. For instance, Tutor Perini’s cost of operations for the nine months ended September 30, 2024, was $3.05 billion, compared to $2.77 billion for the same period in 2023.
Operational Risks
Operational risks, including project execution delays, can affect revenue recognition. During the third quarter of 2024, the company experienced a loss from construction operations of $106.8 million, attributed to several unfavorable adjustments.
Financial Risks
Financial risks include high levels of debt. As of September 30, 2024, total debt stood at $681.4 million, down from $899.7 million at the end of 2023. The company has a committed line of credit totaling $170 million, which may be utilized for various purposes.
Strategic Risks
Strategic risks arise from the company's reliance on large contracts, which can be affected by changes in government spending on infrastructure. The company’s revenue for the nine months ended September 30, 2024, was $3.26 billion, up from $2.86 billion in the same period in 2023, indicating growth but also highlighting reliance on large projects.
Mitigation Strategies
Tutor Perini has implemented various strategies to mitigate risks, including diversifying its project portfolio and enhancing operational efficiencies. The company expects cash generated from operations to range from $425 million to $575 million for the full year of 2024.
| Risk Factor | Description | Impact | Mitigation Strategies |
|---|---|---|---|
| Industry Competition | High competition in construction leading to potential margin erosion. | Increased pressure on pricing. | Diversifying project portfolio. |
| Regulatory Changes | Changes in laws affecting operations. | Delays in project execution. | Monitoring regulatory landscape. |
| Market Conditions | Fluctuations in material costs and labor. | Impact on project profitability. | Fixed-price contracts where possible. |
| Operational Risks | Delays in project execution. | Losses from construction operations. | Improving project management practices. |
| Financial Risks | High levels of debt. | Increased interest expenses. | Refinancing and managing debt levels. |
| Strategic Risks | Reliance on large contracts. | Vulnerability to changes in government spending. | Diversifying client base and project types. |
Future Growth Prospects for Tutor Perini Corporation (TPC)
Future Growth Prospects for Tutor Perini Corporation
Analysis of Key Growth Drivers
The company has identified several key growth drivers, including:
- New Awards: Consolidated new awards totaled $4.7 billion for the three months ended September 30, 2024, and $7.1 billion for the nine months ended September 30, 2024.
- Backlog Growth: As of September 30, 2024, total backlog reached $14.0 billion, a 38% increase from $10.2 billion at the end of 2023.
- Market Segmentation: The backlog mix is approximately 49% Civil, 37% Building, and 14% Specialty Contractors.
Future Revenue Growth Projections and Earnings Estimates
Revenue for the nine months ended September 30, 2024, was $3.3 billion, reflecting a 14% increase compared to the same period in 2023. Analysts project continued growth, driven by:
- Increased Project Execution: Revenue for the Building segment increased by 37% year-over-year.
- Long-Term Infrastructure Projects: Many new projects will span longer timeframes, supporting sustained revenue over several years.
Strategic Initiatives or Partnerships That May Drive Future Growth
Strategic initiatives include:
- Significant New Contracts: Major projects awarded include a $1.66 billion mass-transit project in Hawaii and a $1.1 billion water conveyance tunnel project in New York.
- Funding from State Measures: Voter-approved funding measures have raised approximately $342 billion for transportation investments.
Competitive Advantages That Position the Company for Growth
The company benefits from several competitive advantages:
- Diverse Project Portfolio: The company has a well-rounded project base across Civil, Building, and Specialty segments, which mitigates risk.
- Strong Financial Backing: Cash and cash equivalents were $287.4 million as of September 30, 2024.
Growth Opportunity Table
| Growth Driver | Current Value | Comparison |
|---|---|---|
| New Awards (3Q 2024) | $4.7 billion | vs. $0.8 billion (3Q 2023) |
| Total Backlog | $14.0 billion | vs. $10.2 billion (Dec 2023) |
| Revenue (9M 2024) | $3.3 billion | vs. $2.9 billion (9M 2023) |
| Building Segment Revenue Growth | 37% | Year-over-year increase |
Overall, the company is positioned to leverage its backlog and strategic initiatives to drive future revenue growth in the coming years.
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Updated on 16 Nov 2024
Resources:
- Tutor Perini Corporation (TPC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Tutor Perini Corporation (TPC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Tutor Perini Corporation (TPC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.