Tetra Tech Inc. (TTEK - Analyst Report) reported third-quarter fiscal 2012 earnings per share from continuing operations of 45 cents, above the Zacks Consensus Estimate of 44 cents and the prior-year earnings of 38 cents.

Total Revenue

Total revenue in the quarter was $684.7 million, an increase of 1.6% year over year. Revenue, net of subcontractor costs, was $516.9 million, up 7.6% from the prior-year quarter. Subcontractor cost in the quarter was $167.8 million, down 13.2% from the year earlier quarter.

Backlog at the end of the reported quarter was recorded at $2.06 billion versus $1.88 billion at the end of the prior year quarter.

Income & Expenses

Operating income in the quarter amounted to $46.3 million, up 17.4% year over year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 12.6% year over year to $59.1 million. Interest expenses are $1.4 million in the quarter compared with $1.7 million in the previous year quarter.

Cash Flow

Tetra Tech generated cash flow from operations of $56.8 million in the quarter compared with $55.8 million in the prior-year period.

Outlook

The company expects that diluted earnings per share will be within 45 cents to 50 cents in the upcoming fourth quarter of fiscal 2012. Revenue, net of subcontractor cost, is projected to lie within $525 million to $575 million in the fourth quarter.

With a rising demand for water-related services in international and the US commercial markets from industrial clients, the company raised it fiscal 2012 earnings per share guidance range from $1.59- $1.66 to $1.61 to $1.66.The revenue, net of subcontractor cost in fiscal 2012, is likely to be within $2.0 billion to $2.1 billion.

Tetra Tech Inc. is a leading provider of consulting, engineering, program management, construction and technical services focusing on resource management and infrastructure. It serves its clients by providing cost-effective and innovative solutions to fundamental needs for water, environmental and alternative energy services.

Its solutions include applied science, research and technology, engineering, design, construction management, construction, operations and maintenance, and information technology. Major competitors of Tetra Tech are Arcadis NV, Shaw Group Inc. () and URS Corporation (URS - Analyst Report).

We currently maintain our ‘Neutral’ recommendation on Tetra Tech Inc. The stock also bears a Zacks #3 Rank, implying a 'Hold' rating over the next one-to-three months.