- Los Angeles-based contractor Tutor Perini posted a loss of $63 million, or $1.23 per share for the second quarter Friday, widely missing analysts’ expectations for profits of 41 cents per share, according to stock tracking site Seeking Alpha.
- Revenue fell to $0.9 billion, a 25% decline from the $1.2 billion the company showed a year ago. Analysts had expected revenue of $1.1 billion.
- The company withdrew its financial guidance for the rest of the year, and said it would issue new guidance once it had greater visibility, but that it expects to post a net loss for 2022.
Last quarter, after posting a loss of $21.6 million, the company reiterated its full-year guidance for profits of $1.15 to $1.60 per share, which surprised analysts at the time.
“Given that you’re reiterating 2022 guidance, you’re by default significantly raising guidance for the remainder of the year,” said Alex Rygiel, an analyst with B. Riley Financial, during the firm’s first quarter conference call in May. “So my question here is, what’s changed to give you that confidence?”
CEO Ron Tutor responded that the firm had entered the year with plenty of cash on hand, and anticipated collecting even more in the months ahead. “To be blunt, we had a significant reserve set up for 2022,” Tutor said.
But that reserve didn’t help it during the second quarter.
The company said the lower revenue was due to reduced project execution, as well as the lingering impacts of the COVID-19 pandemic. It attributed its overall loss to a range of factors, including unfavorable project adjustments, claims and change orders, and an unexpected reversal of previously awarded legal damages.
There were two positives in the report: Tutor Perini’s backlog, or projects it has won but hasn’t yet started, increased 14% to $8.5 billion during the second quarter of 2022, compared to $7.5 billion as of June 30, 2021.
And it generated $58 million in cash from operating activities, compared to using $84.6 million in cash a year earlier. Combined with positive cash flow from the first quarter of 2022, that contributed $178.7 million in cash for the first six months of 2022, the largest amount the company has generated during the first six months of any year since 2008.
On June 14, Tutor Perini lost an appeal for a dispute regarding its Alaskan Way Viaduct tunneling project in Seattle, which it is working on via a joint venture with Dragados USA.
In its 10-Q filing Friday, Tutor Perini said the result was $57.2 million in damages awarded to Washington State Department of Transportation, for which the JV would be responsible if further appeals fail. Tutor Perini said its share was approximately 45%, or $25.7 million.
The JV petitioned the Washington State Supreme Court for a discretionary review of the ruling, which is still pending, according to its 10-Q.
Tutor Perini is scheduled to hold a conference call with analysts at 11 a.m. Eastern Time Friday. Check back to Construction Dive for updates.