Tutor Perini's Q3 income, revenue fall

Dive Brief:

Tutor Perini Corp.’s reported results for the third quarter of 2018 revealed it had $1.1 billion in revenue, which was 6% less than last year’s figure of $1.2 billion. The company attributes that decrease to the completion of a large technology office project in California.
The contractor said that lower-than-expected revenue and income from construction operations stemmed from delays on some projects, including the California High-Speed Rail project, and that new project execution revenue did not offset reduced revenue from completed or nearly-completed projects. As a result, income was $47.3 million, down 4% from the $49.1 million for the same period last year, while net income was $21.3 million compared to last year's $23.6 million.
Backlog, however, remains strong at $8.5 billion, the company said, climbing 14% from $7.5 billion a year ago, but down slightly from its record-breaking second-quarter backlog of $8.7 billion. New awards and adjustments to in-process contracts for the quarter totaled $948 million. Third-quarter cash flow from operations amounted to $27.6 million.

Dive Insight:

Despite lower-than-expected Q3 results prompted by "shifted" contributions and numerous owner-imposed delays from the California rail project, chairman and CEO Ronald Tutor said the company anticipates greater earnings in coming years. “The impact of this shift, combined with the timing of contributions from certain other projects, is that a significant amount of our revenue and earnings has moved from 2018 to 2019 and 2020,” he said. “These factors together with our growing, higher-margin backlog, sizeable pending awards and exploding pipeline of bidding opportunities should result in significantly greater earnings in both 2019 and 2020.”

The $77 billion high-speed bullet train opening has been delayed by four years as costs continue to climb. The first phase is now scheduled to open in 2029 with full opening anticipated for 2033, pending complete funding.

Tutor Perini also anticipates a contract award for the $800 million Minneapolis Southwest Light Rail Transit project by the middle of this month, for which the joint venture of Lunda Construction and C.S. McCrossan submitted the lowest bid of $799 million. Tutor Perini is Lunda’s parent company.

The Metropolitan Council, which is the authority and operating agency behind the rail, had been considering two bids. After it didn’t hear back from the other bidding team by a Sept. 28 deadline, it declared that bid “no longer valid,” leaving the Lunda/C.S. McCrossan team the last one standing. In addition to the 14.5 miles of rail infrastructure itself, which will extend the Metro Green Line from downtown Minneapolis to the suburb of Eden Prairie, the project also will include 16 new stations.

In addition, the firm, along with its joint venture partner Frontier-Kemper Constructors Inc., is working on the $410 million Purple Line tunnel in Los Angeles. Project scope will encompass the design and build of twin-bored tunnels for subway service along the third and final 2.6-mile phase of the line’s extension from downtown LA to the Westside region. Preconstruction is expected to occur until December 2019 with project completion by 2026.