LOS ANGELES - Tutor Perini Corporation (NYSE: NYSE:TPC), a prominent construction firm, has announced expectations of a record operating cash flow for 2024, ranging from $425 million to $575 million. The company plans to leverage this strong cash position to prepay $100 million to $150 million of its Term Loan B debt by year-end and an additional $50 million to $75 million in the first quarter of 2025.
Despite projecting a net loss for the third quarter due to resolved disputes, management anticipates a return to profitability in 2025. These disputes, some of which were settled favorably, are expected to contribute to the forecasted cash flow surge. However, the company has withdrawn its earnings per share (EPS) guidance for 2024 and will offer 2025 guidance in February when reporting full-year results.
The company's backlog is projected to reach a new high of approximately $14 billion as of September 30, 2024, marking a 35% increase from the previous quarter. This growth is attributed to significant new project awards, with two major projects yet to be announced. The backlog could further increase by year-end, pending decisions on other substantial projects in the fourth quarter.
The anticipated strong cash flow is driven by cash collections from the resolution of disputed matters and project execution activities. The company has already achieved an operating cash flow of approximately $175 million year-to-date through the third quarter.
Tutor Perini's preliminary results are subject to revision as financial closing procedures are completed, and actual results may differ materially from these estimates. The company's management has prepared these preliminary estimates, which have not been audited or reviewed by independent accountants.
This report is based on a press release statement and aims to provide an unbiased summary of Tutor Perini's financial outlook and strategic plans for debt reduction and profitability.
In other recent news, Tutor Perini Corporation, through its subsidiary Fisk Electric Company, has secured a $29 million phase of a larger $147 million contract for the new Harris Health hospital in Houston, Texas. The project is set to commence in the fourth quarter of 2024 and aims for completion by the fourth quarter of 2028. The new hospital will become the third Level I trauma center in Harris County and is expected to open its doors in late 2028.
In financial developments, Tutor Perini reported a 10% increase in consolidated revenue for the second quarter of 2024, with the company's Civil segment showing robust profitability. This strong performance contributed to a substantial backlog growth compared to the first quarter of 2024. The company reaffirmed its earnings per share guidance for the year and projected considerable growth in future periods.
However, Tutor Perini has also been implicated in a hacking case involving British national Robert Westbrook. Accused of hacking into the computer systems of five companies, including Tutor Perini, Westbrook allegedly used insider information to trade stocks before earnings were made public. The U.S. Department of Justice is pursuing Westbrook's extradition from London to face these charges. Despite this, Tutor Perini maintains a $10.4 billion backlog and anticipates substantial growth in the latter half of 2024 and into 2025.
InvestingPro Insights
Tutor Perini's (NYSE: TPC) recent announcement aligns with several key insights from InvestingPro. The company's projection of record operating cash flow for 2024 is consistent with an InvestingPro Tip indicating that TPC's valuation implies a strong free cash flow yield. This robust cash position is expected to enable the company to reduce its debt significantly, which could improve its financial health.
The anticipated return to profitability in 2025 is supported by another InvestingPro Tip, which suggests that net income is expected to grow this year. This projection is particularly noteworthy given that TPC has not been profitable over the last twelve months, according to InvestingPro data.
The company's impressive backlog growth of 35% quarter-over-quarter to $14 billion is reflected in its recent market performance. InvestingPro data shows that TPC has experienced a substantial 105.27% price total return over the past six months, and an even more remarkable 292.23% return over the last year.
Despite these positive indicators, investors should note that TPC currently suffers from weak gross profit margins, as highlighted by InvestingPro. The latest data shows a gross profit margin of 7.8% for the last twelve months as of Q2 2024, which may be an area for improvement as the company aims for profitability.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for TPC, providing a deeper understanding of the company's financial position and market outlook.
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