Tetra Tech, Inc. (TTEK - Free Report) reported impressive results for the first quarter of fiscal 2021 (ended Dec 27, 2020), with earnings surpassing estimates by 17.1%. This was the 14th consecutive quarter of better-than-anticipated results.
The company’s adjusted earnings per share in the reported quarter came in at 96 cents, handily outpacing the Zacks Consensus Estimate of 82 cents. Also, earnings increased 14.3% from the year-ago quarter’s 84 cents.
The bottom line also topped management’s projection of 78-83 cents per share.
Revenues & Segmental Performance
In the fiscal first quarter, Tetra Tech generated adjusted revenues of $765.1 million, reflecting a year-over-year decline of 4.1%. Adjusted net revenues (adjusted revenues minus subcontractor costs) came in at $605.2 million, down 1.5%. The figure surpassed the company’s guidance of $570-$600 million.
Further, Tetra Tech’s revenues exceeded the Zacks Consensus Estimate of $589 million.
Backlog at the end of the quarter was $3,188.1 million, down 1.6% from the previous quarter.
Revenues from the U.S. Federal customers (accounting for 31% of the quarter’s revenues) were up 8% year over year. Growth in advanced analytics was negated by a delay in international development projects.
The U.S. Commercial sales (22% of the quarter’s revenues) declined 7% year over year on lower discretionary industrial programs. Stability was witnessed in regulatory-driven programs.
The U.S. State and Local sales (16% of the quarter’s revenues) increased 11% on strength in the municipal digital water system businesses. International sales (31% of the quarter’s revenues) decreased 8% year over year.
The company reports revenues under the segments discussed below:
Net sales of Government Services Group came in at $344.9 million, up 4.6% year over year.
Revenues from Commercial / International Services Group totaled $260.3 million, underlining a year-over-year decline of 8.4%.
Margin Profile
In the fiscal first quarter, Tetra Tech’s subcontractor costs totaled $159.9 million, reflecting a decline of 12.9% from the year-ago quarter. Other costs of revenues (adjusted) were $488.9 million, down 3.1%. Selling, general and administrative expenses (adjusted) were $50.1 million, flaring up 8%.
Net income in the reported quarter increased 10.8% year over year to $52.4 million, while adjusted margin expanded 70 basis points 10.9%.
Balance Sheet and Cash Flow
Exiting the fiscal first quarter, Tetra Tech had cash and cash equivalents of $163.4 million, up 3.7% from the $157.5 million recorded at the end of the prior quarter. Long-term debt was up 13.9% sequentially to $276 million.
During the quarter, the company’s proceeds from borrowings amounted to $123.5 million, while repayments totaled $114.8 million.
In the first three months of fiscal 2021, it generated net cash of $33.2 million from operating activities against $18 million used in the year-ago period. Capital expenditure was $1.8 million, down 46.1%.
Shareholder-Friendly Policy
In fiscal first quarter, the company bought back shares worth $15 million and distributed dividends totaling $9.2 million.
Exiting the fiscal first quarter, the company had $193 million worth authorization left under its approved buyback programs.
Outlook
For fiscal 2021 (ending September 2021), Tetra Tech anticipates net revenues of $2.40-$2.55 compared with $2.35-$2.55 billion guided earlier, while adjusted earnings are predicted to be $3.45-$3.60, compared with $3.30-$3.50, predicted earlier. The bottom-line projection is higher than the $3.26 recorded in fiscal 2020.
For the fiscal second quarter (ending March 2020), the company estimates net revenues of $565-$595 million and adjusted earnings per share of 73-78 cents.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks are AGCO Corporation (AGCO - Free Report) , AptarGroup, Inc. (ATR - Free Report) and Dover Corporation (DOV - Free Report) . While AGCO currently sports a Zacks Rank #1 (Strong Buy), AptarGroup and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO delivered a positive earnings surprise of 434.48%, on average, in the trailing four quarters.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 18.1%, on average, in the trailing four quarters.
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Tetra Tech, Inc. (TTEK - Free Report) reported impressive results for the first quarter of fiscal 2021 (ended Dec 27, 2020), with earnings surpassing estimates by 17.1%. This was the 14th consecutive quarter of better-than-anticipated results.
The company’s adjusted earnings per share in the reported quarter came in at 96 cents, handily outpacing the Zacks Consensus Estimate of 82 cents. Also, earnings increased 14.3% from the year-ago quarter’s 84 cents.
The bottom line also topped management’s projection of 78-83 cents per share.
Revenues & Segmental Performance
In the fiscal first quarter, Tetra Tech generated adjusted revenues of $765.1 million, reflecting a year-over-year decline of 4.1%. Adjusted net revenues (adjusted revenues minus subcontractor costs) came in at $605.2 million, down 1.5%. The figure surpassed the company’s guidance of $570-$600 million.
Further, Tetra Tech’s revenues exceeded the Zacks Consensus Estimate of $589 million.
Backlog at the end of the quarter was $3,188.1 million, down 1.6% from the previous quarter.
Revenues from the U.S. Federal customers (accounting for 31% of the quarter’s revenues) were up 8% year over year. Growth in advanced analytics was negated by a delay in international development projects.
The U.S. Commercial sales (22% of the quarter’s revenues) declined 7% year over year on lower discretionary industrial programs. Stability was witnessed in regulatory-driven programs.
The U.S. State and Local sales (16% of the quarter’s revenues) increased 11% on strength in the municipal digital water system businesses. International sales (31% of the quarter’s revenues) decreased 8% year over year.
The company reports revenues under the segments discussed below:
Net sales of Government Services Group came in at $344.9 million, up 4.6% year over year.
Revenues from Commercial / International Services Group totaled $260.3 million, underlining a year-over-year decline of 8.4%.
Margin Profile
In the fiscal first quarter, Tetra Tech’s subcontractor costs totaled $159.9 million, reflecting a decline of 12.9% from the year-ago quarter. Other costs of revenues (adjusted) were $488.9 million, down 3.1%. Selling, general and administrative expenses (adjusted) were $50.1 million, flaring up 8%.
Net income in the reported quarter increased 10.8% year over year to $52.4 million, while adjusted margin expanded 70 basis points 10.9%.
Balance Sheet and Cash Flow
Exiting the fiscal first quarter, Tetra Tech had cash and cash equivalents of $163.4 million, up 3.7% from the $157.5 million recorded at the end of the prior quarter. Long-term debt was up 13.9% sequentially to $276 million.
During the quarter, the company’s proceeds from borrowings amounted to $123.5 million, while repayments totaled $114.8 million.
In the first three months of fiscal 2021, it generated net cash of $33.2 million from operating activities against $18 million used in the year-ago period. Capital expenditure was $1.8 million, down 46.1%.
Shareholder-Friendly Policy
In fiscal first quarter, the company bought back shares worth $15 million and distributed dividends totaling $9.2 million.
Exiting the fiscal first quarter, the company had $193 million worth authorization left under its approved buyback programs.
Outlook
For fiscal 2021 (ending September 2021), Tetra Tech anticipates net revenues of $2.40-$2.55 compared with $2.35-$2.55 billion guided earlier, while adjusted earnings are predicted to be $3.45-$3.60, compared with $3.30-$3.50, predicted earlier. The bottom-line projection is higher than the $3.26 recorded in fiscal 2020.
For the fiscal second quarter (ending March 2020), the company estimates net revenues of $565-$595 million and adjusted earnings per share of 73-78 cents.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks are AGCO Corporation (AGCO - Free Report) , AptarGroup, Inc. (ATR - Free Report) and Dover Corporation (DOV - Free Report) . While AGCO currently sports a Zacks Rank #1 (Strong Buy), AptarGroup and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO delivered a positive earnings surprise of 434.48%, on average, in the trailing four quarters.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 18.1%, on average, in the trailing four quarters.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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