Tutor Perini Posts Record Quarter, Raises Profit Outlook
Tutor Perini (TPC) reported diluted earnings of $1.23 a share for the second quarter, up from $0.38 a year earlier, as revenue reached a record $1.6 billion.
Tutor Perini (TPC) reported a record second quarter, with revenue rising 19% to $1.6 billion and diluted earnings climbing to $1.23 a share from $0.38 a year earlier. The construction company raised its full-year adjusted earnings guidance to a range of $5.15 to $5.45 a share, up from $4.90 to $5.30, the first increase after the first quarter's release had simply affirmed the prior range.
The quarter marked a sharp turn from the first three months of the year. Revenue growth had already been accelerating, moving from 11% year-over-year in the first quarter to 19% in the second, but profitability improved even faster. Income from construction operations reached a record $117.7 million, up 54% from a year earlier, reversing a 9% decline in the first quarter and lifting operating margin to 7.2% of revenue from 4.2%.
Adjusted earnings per share rose 23% to $1.74 from $1.41, a slower pace of growth than the first quarter's 58% increase, though the comparison reflects an unusually strong prior-year quarter rather than any weakening in the underlying business. Diluted GAAP earnings benefited from a swing in share-based compensation expense, which had cost $0.43 a share in the first quarter as liability-classified awards were marked up and instead added $0.53 a share in the second quarter as those awards vested. Net income attributable to the company more than doubled sequentially, to $65.7 million from $25.7 million.
All three of the company's segments accelerated. Building segment revenue growth jumped to 21% from 3% in the first quarter, the sharpest turn of the three, while Specialty Contractors revenue grew 47%, up from 24%, and Civil grew 11%, a slight deceleration from 14%. Segment income followed the same pattern: Civil income rose to $124.5 million from $87.7 million, Building income rose to $31.3 million from $16.3 million, and Specialty Contractors swung to $5.7 million in income from a $0.6 million loss.
Backlog was largely flat, rising to $19.9 billion from $19.8 billion after $1.7 billion in new awards during the quarter, a booking pace slower than what had been implied by prior-quarter backlog levels. Operating cash flow for the first half of the year totaled $334.1 million, up 17% from $285.3 million a year earlier — a more modest gain than the 542% jump reported for the first quarter alone, which had been flattered by a weak $22.9 million comparison in the first quarter of 2024.
Tutor Perini used the quarter to reshape its balance sheet. The company completed a debt refinancing on July 2 that is expected to cut annual senior notes interest expense by about $21 million and more than double its revolving credit facility, following a $400 million senior notes offering in June used to redeem its 11.875% notes due 2029. Total debt fell 3% to $396 million at June 30 from $407 million at year-end, leaving the company with cash exceeding total debt by $542 million.
The company also resumed returning cash to shareholders, repurchasing 137,374 shares for $10 million at an average price of $72.78 under its $200 million buyback program, which had $170 million remaining, and raised its quarterly dividend 50% to $0.09 a share from $0.06. Neither the buyback nor the dividend increase had been mentioned in the first-quarter release.