Tetra Tech, Inc. (TTEK - Free Report) reported impressive first-quarter fiscal 2023 results. The company’s earnings beat the Zacks Consensus Estimate by 11.7%, marking the 22nd consecutive quarter of delivering a surprise. Sales also surpassed estimates by 2.2%.
Tetra Tech’s adjusted earnings per share in the reported quarter were $1.34, ahead of the Zacks Consensus Estimate of $1.20. Quarterly earnings expanded 12.6% from the year-ago reported figure of $1.19.
The bottom line also surpassed management’s projection of $1.15-$1.20 per share.
Revenue & Segmental Performance
In the fiscal first quarter, Tetra Tech generated adjusted revenues of $894.8 million, reflecting a year-over-year increase of 4.2%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $736.6 million, up 8.4% year over year. The quarterly top line came above management’s guidance of $675-$725 million.
Tetra Tech’s revenues exceeded the Zacks Consensus Estimate of $721 million.
The backlog at the end of the quarter was $3,814.3 million, up 11% year over year.
Revenues from U.S. Federal customers (accounting for 28% of the quarter’s revenues) were up 10% year over year. U.S. Commercial sales (24% of the quarter’s revenues) increased 22% year over year on higher renewable energy and environmental programs.
U.S. State and Local sales (17% of the quarter’s revenues) increased 10% due to strength in municipal infrastructure and digital water. International sales (31% of the quarter’s revenues) increased 13% year over year, backed by strength in sustainable infrastructure and high-performance building.
Tetra Tech reports revenues under the segments discussed below:
Net sales of Government Services Group were $471.1 million, up 3.3% year over year. Revenues from the Commercial/International Services Group totaled $439.6 million, representing a year-over-year increase of 5.6%.
Margin Profile
In the fiscal first quarter, Tetra Tech’s subcontractor costs totaled $158.2 million, reflecting a decrease of 11.7% from the year-ago quarter. Other costs of revenues were $583.3 million, up 8.1%. Selling, general and administrative expenses were $56.5 million, up 7.5% from the year-ago quarter.
Operating income (adjusted) in the reported quarter increased 17% year over year to $97 million, while the adjusted margin expanded 90 basis points to 13.1%.
Balance Sheet and Cash Flow
While exiting first-quarter fiscal 2023, Tetra Tech had cash and cash equivalents of $164.4 million, down 11.2% from $185.1 million recorded at the end of the fourth quarter of fiscal 2022. Long-term debt increased 5% from $234.1 million recorded at the end of fourth-quarter fiscal 2022 to $246.3 million.
In the first three months of fiscal 2023, Tetra Tech generated net cash of $25.2 million from operating activities compared with $82.4 million in the prior fiscal year’s comparable period. Capital expenditure was $5 million, up 233.3% year over year. In the said period, TTEK’s proceeds from borrowings amounted to $60.9 million, while repayments on long-term debt totaled $73.1 million.
Shareholder-Friendly Policies
Tetra Tech didn’t buy back shares in the fiscal first quarter. It bought back shares worth $50 million in the year-ago quarter. It distributed dividends totaling $12.2 million in the first quarter of fiscal 2023. This compares favorably with the dividends of $10.8 million distributed in the fiscal first quarter of 2022.
Outlook
For fiscal 2023 (ending September 2023), Tetra Tech anticipates net revenues of $3.00-$3.15 billion compared with $2.90-$3.10 billion anticipated earlier. Adjusted earnings are predicted to be $4.90-$5.05 compared with $4.70-$4.90 per share predicted earlier.
For the second quarter of fiscal 2023 (ending March 2023), management estimates net revenues of $ $685-$735 million and adjusted earnings of $1.03-$1.08 per share.
Zacks Rank & Stocks to Consider
TTEK currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 20.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 10.9% for fiscal 2023 (ending June 2023) in the past 60 days. Shares of Applied Industrial have risen 38.5% in the past six months.
Allegion plc (ALLE - Free Report) presently sports a Zacks Rank of 1. ALLE’s earnings surprise in the last four quarters was 8.8%, on average.
In the past 60 days, Allegion’s earnings estimates have remained steady for 2022. The stock has gained 19.5% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have increased by a penny. The stock has rallied 18.3% in the past six months.
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Tetra Tech, Inc. (TTEK - Free Report) reported impressive first-quarter fiscal 2023 results. The company’s earnings beat the Zacks Consensus Estimate by 11.7%, marking the 22nd consecutive quarter of delivering a surprise. Sales also surpassed estimates by 2.2%.
Tetra Tech’s adjusted earnings per share in the reported quarter were $1.34, ahead of the Zacks Consensus Estimate of $1.20. Quarterly earnings expanded 12.6% from the year-ago reported figure of $1.19.
The bottom line also surpassed management’s projection of $1.15-$1.20 per share.
Revenue & Segmental Performance
In the fiscal first quarter, Tetra Tech generated adjusted revenues of $894.8 million, reflecting a year-over-year increase of 4.2%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $736.6 million, up 8.4% year over year. The quarterly top line came above management’s guidance of $675-$725 million.
Tetra Tech’s revenues exceeded the Zacks Consensus Estimate of $721 million.
The backlog at the end of the quarter was $3,814.3 million, up 11% year over year.
Revenues from U.S. Federal customers (accounting for 28% of the quarter’s revenues) were up 10% year over year. U.S. Commercial sales (24% of the quarter’s revenues) increased 22% year over year on higher renewable energy and environmental programs.
U.S. State and Local sales (17% of the quarter’s revenues) increased 10% due to strength in municipal infrastructure and digital water. International sales (31% of the quarter’s revenues) increased 13% year over year, backed by strength in sustainable infrastructure and high-performance building.
Tetra Tech reports revenues under the segments discussed below:
Net sales of Government Services Group were $471.1 million, up 3.3% year over year. Revenues from the Commercial/International Services Group totaled $439.6 million, representing a year-over-year increase of 5.6%.
Margin Profile
In the fiscal first quarter, Tetra Tech’s subcontractor costs totaled $158.2 million, reflecting a decrease of 11.7% from the year-ago quarter. Other costs of revenues were $583.3 million, up 8.1%. Selling, general and administrative expenses were $56.5 million, up 7.5% from the year-ago quarter.
Operating income (adjusted) in the reported quarter increased 17% year over year to $97 million, while the adjusted margin expanded 90 basis points to 13.1%.
Balance Sheet and Cash Flow
While exiting first-quarter fiscal 2023, Tetra Tech had cash and cash equivalents of $164.4 million, down 11.2% from $185.1 million recorded at the end of the fourth quarter of fiscal 2022. Long-term debt increased 5% from $234.1 million recorded at the end of fourth-quarter fiscal 2022 to $246.3 million.
In the first three months of fiscal 2023, Tetra Tech generated net cash of $25.2 million from operating activities compared with $82.4 million in the prior fiscal year’s comparable period. Capital expenditure was $5 million, up 233.3% year over year. In the said period, TTEK’s proceeds from borrowings amounted to $60.9 million, while repayments on long-term debt totaled $73.1 million.
Shareholder-Friendly Policies
Tetra Tech didn’t buy back shares in the fiscal first quarter. It bought back shares worth $50 million in the year-ago quarter. It distributed dividends totaling $12.2 million in the first quarter of fiscal 2023. This compares favorably with the dividends of $10.8 million distributed in the fiscal first quarter of 2022.
Outlook
For fiscal 2023 (ending September 2023), Tetra Tech anticipates net revenues of $3.00-$3.15 billion compared with $2.90-$3.10 billion anticipated earlier. Adjusted earnings are predicted to be $4.90-$5.05 compared with $4.70-$4.90 per share predicted earlier.
For the second quarter of fiscal 2023 (ending March 2023), management estimates net revenues of $ $685-$735 million and adjusted earnings of $1.03-$1.08 per share.
Zacks Rank & Stocks to Consider
TTEK currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 20.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 10.9% for fiscal 2023 (ending June 2023) in the past 60 days. Shares of Applied Industrial have risen 38.5% in the past six months.
Allegion plc (ALLE - Free Report) presently sports a Zacks Rank of 1. ALLE’s earnings surprise in the last four quarters was 8.8%, on average.
In the past 60 days, Allegion’s earnings estimates have remained steady for 2022. The stock has gained 19.5% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have increased by a penny. The stock has rallied 18.3% in the past six months.
Where Will Stocks Go…
If Biden Wins? If Trump Wins?
The answers may surprise you.
Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!
Now is the time to download Zacks' free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…
1. Medical manufacturer has gained +11,000% in the last 15 years.
2. Rental company is absolutely crushing its sector.
3. Energy powerhouse plans to grow its already large dividend by 25%.
4. Aerospace and defense standout just landed a potentially $80 billion contract.
5. Giant Chipmaker is building huge plants in the U.S.
Hurry, Download Special Report FREE >>
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