U.S. Markets closed

Tetra Tech Beats on Q1 Earnings

Zacks Equity Research

Tetra Tech Inc (TTEK) reported fiscal first-quarter 2014, ending Dec 29, 2013, earnings of 42 cents per share, beating the Zacks Consensus Estimate of 38 cents. The earnings increased 2.4% from the prior-year figure of 41 cents a share. 

The improvement was driven by the company’s business in the oil and gas market which witnessed an organic growth of more than 20% in the quarter. Moreover, strong cash generation in the quarter will aid the company’s share repurchase program while also allowing strategic mergers and acquisitions in the future.

Quarterly Details

Total revenue in the reported quarter fell 2.0% to $645.8 million from $658.5 million in the prior-year period. Revenues, net of subcontractor costs, were $483.0 million compared with $497.2 million in the year-earlier quarter. However, revenues were well ahead of the Zacks Consensus Estimate of $492 million.

Backlog was $1.9 billion at the end of the reported quarter, a marginal increase from the previous quarter’s backlog.

Tetra Tech generated cash from operations of $41.7 million, an increase of 135.0% from $17.8 million in the first quarter of 2013.


Following the earnings release, management provided guidance for the second-quarter and full-year 2014. Tetra Tech expects earnings for the second quarter of fiscal 2014 to be in the range of 37 cents a share to 42 cents a share. Revenues, net of subcontractor costs, for the second quarter, are expected to range from $450 million to $500 million.

For fiscal 2014, Tetra Tech reaffirmed its guidance for earnings and revenues. The earnings are expected to be in the range of $1.60–$1.80 per share. Revenues, net of subcontractor costs, for fiscal 2014, are expected to range from $2.1 billion to $2.3 billion. The recent issuing of the U.S. federal spending bill, lending visibility to the company’s government business, aided its outlook.

Contract Wins

Along with the earnings release, Tetra Tech received a couple of contracts from the U.S. Army Corps of Engineers and for the U.S. Coast Guard (:USCG). The aggregate value of the two deals is approximately $120 million. As per the first contract, Tetra Tech is required to provide designing services for the core components of the project including architectural and engineering plans. The second contract entails the company to provide diverse engineering and architectural services for a period of five years. It also necessitates the company to bide by the environmental and sustainability norms while executing the services in and around the United States.

Zacks Rank

Tetra Tech currently has a Zacks Rank #2 (Buy). Some other stocks with the same Zacks Rank in the pollution control industry include Fuel-Tech, Inc. (FTEK), Heritage-Crystal Clean, Inc (HCCI) and Pure Cycle Corporation (PCYO). While Pure Cycle Corp reported a loss of 4 cents in its first-quarter results on Jan 10, Fuel-Tech and Heritage-Crystal Clean are expected to release their quarterly earnings soon.

Read the Full Research Report on TTEK
Read the Full Research Report on FTEK
Read the Full Research Report on PCYO
Read the Full Research Report on HCCI

Zacks Investment Research