We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Tetra Tech (TTEK) Up 3.3% Since the Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Tetra Tech, Inc. (TTEK - Free Report) . Shares have added about 3.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Tetra Tech Beats on Q2 Earnings, Raises EPS View
In the recently reported second-quarter fiscal 2017 results, Tetra Tech posted its second consecutive earnings beat. The company’s earnings from ongoing operations of $0.48 beat the Zacks Consensus Estimate of $0.46 by 4.3%. Earnings exceeded the company’s guided range of $0.42–$0.47.
Tetra Tech fared even better year over year, with adjusted earnings up 30% from the prior-year quarter’s figure of $0.37. Decent top-line growth and greater operating efficiency resulting from cost-management initiatives, fueled bottom-line growth.
Inside the Headlines
Net revenues were up 6.9% year over year to $511.9 million, comfortably beating the Zacks Consensus Estimate of $491 million. Revenues surpassed the upper end of the company’s estimated range of $450–$475 million. Moreover, Tetra Tech’s ongoing revenues grew 8% to $515.6 million on a year-over-year basis.
The top line was supported by the expansion of the U.S. Federal, State and Local, and Commercial development projects. Primarily, strong performance of the Water, Environment and Infrastructure segment supplemented the quarterly sales performance.
Water, Environment and Infrastructure revenues continued their solid growth trajectory, rising 21.0% year over year to $201 million. This segment primarily benefited from robust performance of the North American infrastructure and environmental business lines.
Also, net revenues from Resource Management and Energy rose 2.0% year over year to $315 million. While the U.S. development projects drove the sales performance, sluggish oil and gas markets restricted top-line growth.
In the quarter under review, total backlog from ongoing operations reached $2.5 billion, marking an impressive jump of 18% year over year, driven by strong orders in the federal and state, and local markets. Some of the notable contracts clinched by the company during the quarter include the $240 million U.S. Navy Remediation contract, the $57 million USAID Pakistan Energy contract and the $25 million USAID Mozambique Monitoring & Evaluation contract.
Additionally, ongoing operating income was up 27% year over year to $44 million.
Liquidity & Cash Flow
At the end of the quarter, Tetra Tech’s cash and cash equivalents were $171.3 million, up from $127 million at the end of first-quarter fiscal 2017. At the end of the fiscal second quarter, the company’s long-term debt was $326.9 million, down from $372.7 million as of Jan 1, 2017.
For the quarter, the company’s cash generated in operations came in at $50.3 million, significantly up from the year-ago figure of $30.2 million.
Share Repurchase
Tetra Tech is highly committed toward rewarding its shareholders through dividends and share buyback programs. On May 1, 2017, the company declared raising its quarterly dividend by 11% to 10 cents per share payable on Jun 2, 2017 to stockholders of record as of May 18.
Currently, Tetra Tech has $180 million remaining under the previously approved $200 million share repurchase program. The company expects to spend $100 million in share repurchases for fiscal 2017, of which, $20 million was spent in the first six months.
Guidance
Concurrent with the quarterly earnings release, Tetra Tech provided revenue and earnings guidance for both the upcoming quarter and fiscal 2017. The company expects third-quarter fiscal 2017 earnings per share to be in the range of $0.50–$0.55. Net revenue for the fiscal third quarter is projected to be within $510–$540 million.
Encouragingly, the company raised its Earnings Per Share (“EPS”) guidance for fiscal 2017. It now projects EPS in the range of $2.10–$2.25 compared with the earlier guided range of $2.00–$2.20. Also, based on the current market scenario, Tetra Tech tweaked its revenue guidance and expects it to be within $2.05–$2.10 billion, instead of the earlier guided range of $2.0–$2.10 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Tetra Tech's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. The stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
The Zacks Consensus Estimate has moved higher over the last 30 days. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Tetra Tech (TTEK) Up 3.3% Since the Last Earnings Report?
It has been about a month since the last earnings report for Tetra Tech, Inc. (TTEK - Free Report) . Shares have added about 3.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Tetra Tech Beats on Q2 Earnings, Raises EPS View
In the recently reported second-quarter fiscal 2017 results, Tetra Tech posted its second consecutive earnings beat. The company’s earnings from ongoing operations of $0.48 beat the Zacks Consensus Estimate of $0.46 by 4.3%. Earnings exceeded the company’s guided range of $0.42–$0.47.
Tetra Tech fared even better year over year, with adjusted earnings up 30% from the prior-year quarter’s figure of $0.37. Decent top-line growth and greater operating efficiency resulting from cost-management initiatives, fueled bottom-line growth.
Inside the Headlines
Net revenues were up 6.9% year over year to $511.9 million, comfortably beating the Zacks Consensus Estimate of $491 million. Revenues surpassed the upper end of the company’s estimated range of $450–$475 million. Moreover, Tetra Tech’s ongoing revenues grew 8% to $515.6 million on a year-over-year basis.
The top line was supported by the expansion of the U.S. Federal, State and Local, and Commercial development projects. Primarily, strong performance of the Water, Environment and Infrastructure segment supplemented the quarterly sales performance.
Water, Environment and Infrastructure revenues continued their solid growth trajectory, rising 21.0% year over year to $201 million. This segment primarily benefited from robust performance of the North American infrastructure and environmental business lines.
Also, net revenues from Resource Management and Energy rose 2.0% year over year to $315 million. While the U.S. development projects drove the sales performance, sluggish oil and gas markets restricted top-line growth.
In the quarter under review, total backlog from ongoing operations reached $2.5 billion, marking an impressive jump of 18% year over year, driven by strong orders in the federal and state, and local markets. Some of the notable contracts clinched by the company during the quarter include the $240 million U.S. Navy Remediation contract, the $57 million USAID Pakistan Energy contract and the $25 million USAID Mozambique Monitoring & Evaluation contract.
Additionally, ongoing operating income was up 27% year over year to $44 million.
Liquidity & Cash Flow
At the end of the quarter, Tetra Tech’s cash and cash equivalents were $171.3 million, up from $127 million at the end of first-quarter fiscal 2017. At the end of the fiscal second quarter, the company’s long-term debt was $326.9 million, down from $372.7 million as of Jan 1, 2017.
For the quarter, the company’s cash generated in operations came in at $50.3 million, significantly up from the year-ago figure of $30.2 million.
Share Repurchase
Tetra Tech is highly committed toward rewarding its shareholders through dividends and share buyback programs. On May 1, 2017, the company declared raising its quarterly dividend by 11% to 10 cents per share payable on Jun 2, 2017 to stockholders of record as of May 18.
Currently, Tetra Tech has $180 million remaining under the previously approved $200 million share repurchase program. The company expects to spend $100 million in share repurchases for fiscal 2017, of which, $20 million was spent in the first six months.
Guidance
Concurrent with the quarterly earnings release, Tetra Tech provided revenue and earnings guidance for both the upcoming quarter and fiscal 2017. The company expects third-quarter fiscal 2017 earnings per share to be in the range of $0.50–$0.55. Net revenue for the fiscal third quarter is projected to be within $510–$540 million.
Encouragingly, the company raised its Earnings Per Share (“EPS”) guidance for fiscal 2017. It now projects EPS in the range of $2.10–$2.25 compared with the earlier guided range of $2.00–$2.20. Also, based on the current market scenario, Tetra Tech tweaked its revenue guidance and expects it to be within $2.05–$2.10 billion, instead of the earlier guided range of $2.0–$2.10 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Tetra Tech, Inc. Price and Consensus
Tetra Tech, Inc. Price and Consensus | Tetra Tech, Inc. Quote
VGM Scores
At this time, Tetra Tech's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. The stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
The Zacks Consensus Estimate has moved higher over the last 30 days. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.