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.
Tetra (TTEK) Down 10.4% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Tetra Tech (TTEK - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tetra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Tetra Tech, Inc. reported better-than-expected results for third-quarter fiscal 2022 (ended June 2022). Earnings beat the Zacks Consensus Estimate by 2.9%, marking the 20th consecutive quarter of delivering a surprise. Sales also surpassed estimates by 0.9%.
Tetra Tech’s adjusted earnings per share in the reported quarter were $1.08, surpassing the Zacks Consensus Estimate of $1.05. Quarterly earnings expanded 13.7% from the year-ago quarter’s reported figure of 95 cents.
The bottom line also surpassed management’s projection of $1.00-$1.05 per share.
Revenue & Segmental Performance
In the fiscal third quarter, Tetra Tech generated adjusted revenues of $890 million, reflecting a year-over-year increase of 11%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $720 million, up 13% year over year. The quarterly top line came above management’s guidance of $665-$715 million.
Tetra Tech’s revenues exceeded the Zacks Consensus Estimate of $714 million.
Backlog at the end of the quarter was $3,512.5 million, up 8% year over year.
Revenues from the U.S. Federal customers (accounting for 27% of the quarter’s revenues) were up 4% year over year. The U.S. Commercial sales (22% of the quarter’s revenues) increased 19% year over year on higher environmental programs.
The U.S. State and Local sales (16% of the quarter’s revenues) increased 10% on strength in the municipal infrastructure. International sales (35% of the quarter’s revenues) increased 18% year over year, backed by strength in Government and commercial segments.
Tetra Tech reports revenues under the segments discussed below:
Net sales of Government Services Group were $338 million, up 9% year over year. Revenues from the Commercial/International Services Group totaled $362 million, representing a year-over-year increase of 25%.
The U.S. State and Local sales (18% of the quarter’s revenues) increased 25% on strength across municipal infrastructure. International sales (34% of the quarter’s revenues) increased 29% year over year, backed by strength in Government and commercial segments.
Tetra Tech reports revenues under the segments discussed below:
Net sales of the Government Services Group were $335 million, up 6% year over year. Revenues from the Commercial/International Services Group totaled $385 million, underlining a year-over-year increase of 19%.
Margin Profile
In the fiscal second quarter, Tetra Tech’s subcontractor costs totaled $169.7 million, reflecting an increase of 3.7% from the year-ago quarter’s level. Other costs of revenues were $575.9 million, up 12.4%. Selling, general and administrative expenses were $60.7 million, up 8.6% from the year-ago quarter’s figure.
Operating income (adjusted) in the reported quarter increased 18.8% year over year to $82.9 million, while the adjusted margin expanded 60 basis points to 11.5%.
Balance Sheet and Cash Flow
At the time of exiting the fiscal third quarter, Tetra Tech had cash and cash equivalents of $217.4 million, up 30.5% from $166.6 million recorded at the end of the fourth quarter of fiscal 2021. Long-term debt increased 17.2% from $200 million recorded at the end of fourth-quarter fiscal 2021 to $234.4 million.
In the first nine months of fiscal 2022, Tetra Tech generated net cash of $276 million from operating activities compared with $226.5 million in the last fiscal year’s comparable period. Capital expenditure was $8.4 million, up 35.5% year over year. In the said period, TTEK’s proceeds from borrowings amounted to $141.5 million, while repayments totaled $108.9 million.
Shareholder-Friendly Policies
Tetra Tech bought back shares worth $150 million and distributed dividends totaling $33.9 million in the first nine months of fiscal 2022. These compare favorably with the share buybacks of $45 million and dividends of $29.2 million distributed in the first nine months of fiscal 2021.
While exiting the fiscal third quarter, TTEK had $398 million worth of authorization left under its approved buyback programs.
Outlook
For fiscal 2022 (ending September 2022), Tetra Tech anticipates net revenues of $2.78-$2.83, higher than $2.72-$2.82 billion expected previously. Adjusted earnings are predicted to be $4.38-$4.43, up from the previously guided range of $4.30-$4.40.
For the fourth quarter of fiscal 2022 (ending September 2022), management estimates net revenues of $676-$726 million and adjusted earnings per share of $1.13-$1.18.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Tetra has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Tetra has a Zacks Rank #3 (Hold). We expect an in-line return 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
Tetra (TTEK) Down 10.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Tetra Tech (TTEK - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Tetra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Tetra Tech (TTEK - Free Report) Q3 Earnings and Revenues Surpass Estimates
Tetra Tech, Inc. reported better-than-expected results for third-quarter fiscal 2022 (ended June 2022). Earnings beat the Zacks Consensus Estimate by 2.9%, marking the 20th consecutive quarter of delivering a surprise. Sales also surpassed estimates by 0.9%.
Tetra Tech’s adjusted earnings per share in the reported quarter were $1.08, surpassing the Zacks Consensus Estimate of $1.05. Quarterly earnings expanded 13.7% from the year-ago quarter’s reported figure of 95 cents.
The bottom line also surpassed management’s projection of $1.00-$1.05 per share.
Revenue & Segmental Performance
In the fiscal third quarter, Tetra Tech generated adjusted revenues of $890 million, reflecting a year-over-year increase of 11%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $720 million, up 13% year over year. The quarterly top line came above management’s guidance of $665-$715 million.
Tetra Tech’s revenues exceeded the Zacks Consensus Estimate of $714 million.
Backlog at the end of the quarter was $3,512.5 million, up 8% year over year.
Revenues from the U.S. Federal customers (accounting for 27% of the quarter’s revenues) were up 4% year over year. The U.S. Commercial sales (22% of the quarter’s revenues) increased 19% year over year on higher environmental programs.
The U.S. State and Local sales (16% of the quarter’s revenues) increased 10% on strength in the municipal infrastructure. International sales (35% of the quarter’s revenues) increased 18% year over year, backed by strength in Government and commercial segments.
Tetra Tech reports revenues under the segments discussed below:
Net sales of Government Services Group were $338 million, up 9% year over year. Revenues from the Commercial/International Services Group totaled $362 million, representing a year-over-year increase of 25%.
The U.S. State and Local sales (18% of the quarter’s revenues) increased 25% on strength across municipal infrastructure. International sales (34% of the quarter’s revenues) increased 29% year over year, backed by strength in Government and commercial segments.
Tetra Tech reports revenues under the segments discussed below:
Net sales of the Government Services Group were $335 million, up 6% year over year. Revenues from the Commercial/International Services Group totaled $385 million, underlining a year-over-year increase of 19%.
Margin Profile
In the fiscal second quarter, Tetra Tech’s subcontractor costs totaled $169.7 million, reflecting an increase of 3.7% from the year-ago quarter’s level. Other costs of revenues were $575.9 million, up 12.4%. Selling, general and administrative expenses were $60.7 million, up 8.6% from the year-ago quarter’s figure.
Operating income (adjusted) in the reported quarter increased 18.8% year over year to $82.9 million, while the adjusted margin expanded 60 basis points to 11.5%.
Balance Sheet and Cash Flow
At the time of exiting the fiscal third quarter, Tetra Tech had cash and cash equivalents of $217.4 million, up 30.5% from $166.6 million recorded at the end of the fourth quarter of fiscal 2021. Long-term debt increased 17.2% from $200 million recorded at the end of fourth-quarter fiscal 2021 to $234.4 million.
In the first nine months of fiscal 2022, Tetra Tech generated net cash of $276 million from operating activities compared with $226.5 million in the last fiscal year’s comparable period. Capital expenditure was $8.4 million, up 35.5% year over year. In the said period, TTEK’s proceeds from borrowings amounted to $141.5 million, while repayments totaled $108.9 million.
Shareholder-Friendly Policies
Tetra Tech bought back shares worth $150 million and distributed dividends totaling $33.9 million in the first nine months of fiscal 2022. These compare favorably with the share buybacks of $45 million and dividends of $29.2 million distributed in the first nine months of fiscal 2021.
While exiting the fiscal third quarter, TTEK had $398 million worth of authorization left under its approved buyback programs.
Outlook
For fiscal 2022 (ending September 2022), Tetra Tech anticipates net revenues of $2.78-$2.83, higher than $2.72-$2.82 billion expected previously. Adjusted earnings are predicted to be $4.38-$4.43, up from the previously guided range of $4.30-$4.40.
For the fourth quarter of fiscal 2022 (ending September 2022), management estimates net revenues of $676-$726 million and adjusted earnings per share of $1.13-$1.18.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Tetra has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Tetra has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.