Dive Brief:
- Tutor Perini this week reported its third quarter 2020 financial results, posting $1.4 billion of revenue, which is the company's highest quarterly result in more than a decade and an increase of 21% since the same quarter last year. Chairman and CEO Ron Tutor said the effects of the COVID-19 pandemic on the company have been minimal.
- Tutor Perini also reported that its quarterly income from operations, $83 million, was the highest since 2008 and a 73% year-over-year increase from the third quarter of 2019. The Los Angeles-based firm generated almost $73 million of cash in the third quarter and $131 million for the first nine months of the year, driven in part by its ability to collect on disputed invoices.
- Tutor attributed the company's strong performance in the third quarter to its progress on large infrastructure projects, including the California High-Speed Rail Authority's bullet train project (shown above), the Minneapolis Southwest Light Rail Transit project, Newark Liberty Airport Terminal One and the Los Angeles County Metropolitan Transportation Authority's Purple Line rail projects. Tutor Perini's backlog at the end of the third quarter was $9.2 billion, and Tutor said the company is tracking $30 billion worth of opportunities, $20 billion of which are scheduled to bid in the next 18 months.
Dive Insight:
The company also reported that all of its segments experienced double-digit growth this quarter compared to the same quarter last year:
- Civil: $612 million, +17%
- Building: $508 million, +22%
- Specialty contractors: $322 million, +29%
Regarding the effects of the coronavirus on its jobsites, Tutor said that the unions the company works with have, thus far, been able to readily replace any workers testing positive or those who must quarantine themselves. In addition, he said, many of their public agency customers have recognized the pandemic as a "cost-reimbursable event," and have said they will pay for related expenses like layoffs and sick leave. Tutor said it is doubtful, however, that those agencies will reimburse the company for costs related to schedule impacts or loss of revenue.
The company also reported some negative financial impacts from the pandemic. Its income from construction operations in the third quarter due to COVID-19 was about $3 million versus $9 million in the second quarter. Approximately $2 million of the Q3 impact was in Tutor Perini's building segment. Tutor said the company is confident that the biggest impacts from the pandemic are behind it, barring a situation in which the outbreak significantly worsens.
Tutor said that he believes the company doesn't have much competition for large, complex civil projects and expects that to be the case "well into the future."
Tutor did, however, tell analysts that bidding has been delayed on some large projects that rely on federal funding but believes that federal lawmakers will act relatively quickly to resume those after the presidential election has been decided.
Tutor Perini is still waiting to hear back from the Honolulu Authority for Rapid Transportation (HART) about its reported $2 billion bid to complete the $9 billion Honolulu Rail project. The city has decided not to back the agreed-upon public-private partnership delivery method, leaving HART to move forward with procurement. HART officials have indicated that it will try to negotiate down the two bids it received for the project.
