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Dive Brief:
- Tutor Perini pulled its earnings guidance for 2024 on Monday, telling investors it expects a loss for the third quarter due to dispute settlements.
- In total, the Los Angeles-based company anticipates approximately $145 million in charges for the quarter due to “an unexpected adverse arbitration decision” for a bridge project in California and the net outcome of six other large disputes, which it didn’t specify in its release.
- Despite that news, Tutor Perini said it had significant award activity in the quarter and expects a backlog of approximately $14 billion, up 32% from the same period last year. It also said it would use positive cash settlements from other disputes to pay down its debt by $100 million to $150 million by the end of the year, and that it expects to return to profitability in 2025.
Dive Insight:
Disputes on multiyear megaprojects have hung over the large civil contractor’s results for several quarters. The firm’s chairman and outgoing CEO Ron Tutor has asked for patience from investors.
Still, those issues have lingered, illustrating the risk that comes with multibillion-dollar projects where timelines can get stretched and projecting costs years down the road can be an inexact science.
“We hope to reverse the negative impact of these decisions in the future,” Tutor said in a news release. “With many of our larger disputes now behind us, we anticipate that we will experience less earnings volatility in 2025 and beyond.”
The contractor hasn’t yet announced when it will report third-quarter earnings.
