On June 18, 2013, California-based consulting, engineering and technical service provider company Tetra Tech Inc. (TTEK) revealed its lower earnings expectation for the third quarter of fiscal 2013.
The lowered guidance factored the impacts of increased restructuring costs from weakness in Eastern Canada and mining. Costs have also increased due to new projects.
During the second quarter earnings call on May 2, 2013, Tetra Tech had mentioned about the prevailing weakness in Eastern Canada and mining that was likely to be detrimental to its business in the in the upcoming quarters.
However, a downward revision in fiscal 2013 third quarter earnings guidance to a loss of 30 cents to 50 cents per share from an earlier guidance of 32 cents to 42 cents earnings per share attracted investigation into possible breaches of fiduciary duty by the company. Law offices of Howard G. Smith, Levi & Korsinsky, Wohl & Fruchter LLP, Bronstein, Gewirtz & Grossman, LLC and others are all engaged in this investigation. This further had an adverse effect on the stock.
Concurrent with the press release, on the 18th of June, the shares of Tetra Tech sank about 13% hitting a new 52-week low at $22.56. Disappointed with the outlook, we expect that it will be several quarters before the company regains its footing in terms of overall profitability.
On April 8, 2013, Tetra Tech had trimmed its outlook for fiscal 2013. This news also had a negative impact on the company’s share price, which fell 6.8% to $26.35 on that day.
Tetra Tech currently has a Zacks Rank #3 (Hold). Other companies in the industry that are worth considering include CECO Environmental Corp. (CECE) with a Zacks Rank #1 (Strong Buy), while Calgon Carbon Corporation (CCC) and Versar Inc. (VSR) have a Zacks Rank #2 (Buy) each.
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