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Tetra Tech, Inc. (TTEK - Free Report) reported mixed second-quarter fiscal 2020 (ended Mar 29, 2020) results, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same.
The company’s adjusted earnings per share in the reported quarter were 73 cents, surpassing the Zacks Consensus Estimate of 72 cents. Also, its earnings grew 4.3% from the year-ago quarter’s 70 cents on sales growth.
Revenues & Segmental Performance
In the reported quarter, Tetra Tech generated adjusted revenues of $734.1 million, reflecting year-over-year growth of 2%. Alternatively, net revenues (adjusted revenues minus subcontractor costs) were $584.5 million, roughly flat year over year. Notably, the company’s revenues missed the Zacks Consensus Estimate of $594 million by 1.6%.
Backlog at the end of the quarter was $3.06 billion, reflecting growth of 9% from the year-ago figure.
Revenues from the U.S. Federal customers accounted for 30% of the quarter’s revenues. Conversely, the U.S. Commercial, and the U.S. State and Local sales accounted for 24% and 13% of the quarter’s revenues, respectively. International sales accounted for 33% of the quarter’s revenues.
The company reports revenues under the segments discussed below:
Net sales of Government Services Group were $321 million, up 1.6% year over year.
Revenues from Commercial / International Services Group totaled $263.5 million, reflecting a year-over-year decline of 3.8%.
Tetra Tech, Inc. Price, Consensus and EPS Surprise
In the reported quarter, Tetra Tech’s subcontractor costs totaled $149.7 million, reflecting growth of 9.1% from the year-ago quarter. Other costs of revenues were $487.5 million, down 0.3% year over year. Selling, general and administrative expenses were $51 million, up 4.3% year over year.
Adjusted operating income in the reported quarter declined 3.5% year over year to $52.6 million and adjusted margin decreased 20 basis points to 9%.
Balance Sheet and Cash Flow
Exiting the fiscal second quarter, Tetra Tech had cash and cash equivalents of $135 million, down 11.8% from $120.7 million recorded at the end of fiscal 2019. Long-term debt was up 3.3% sequentially to $333 million.
In the first six months of fiscal 2020, the company generated net cash of $83.2 million from operating activities, down 16.1% from the year-ago comparable period. Capital expenditure was $5.9 million, down 18.1% year over year.
Shareholder-Friendly Policy
In the first six months of fiscal 2020, the company bought back shares worth $81.7 million and distributed dividends totaling $16.4 million.
Outlook
On uncertainties, regarding the impacts of the coronavirus outbreak on financial and operating results, Tetra Tech has withdrawn its revenue and earnings guidance for fiscal 2020.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Intellicheck delivered a positive earnings surprise of 36.91%, on average, in the trailing four quarters.
ABB delivered a positive earnings surprise of 30.77%, on average, in the trailing four quarters.
Acco Brands delivered a positive earnings surprise of 19.04%, on average, in the trailing four quarters.
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Tetra Tech (TTEK) Q2 Earnings Surpass Estimates, Rise Y/Y
Tetra Tech, Inc. (TTEK - Free Report) reported mixed second-quarter fiscal 2020 (ended Mar 29, 2020) results, wherein earnings surpassed the Zacks Consensus Estimate but revenues lagged the same.
The company’s adjusted earnings per share in the reported quarter were 73 cents, surpassing the Zacks Consensus Estimate of 72 cents. Also, its earnings grew 4.3% from the year-ago quarter’s 70 cents on sales growth.
Revenues & Segmental Performance
In the reported quarter, Tetra Tech generated adjusted revenues of $734.1 million, reflecting year-over-year growth of 2%. Alternatively, net revenues (adjusted revenues minus subcontractor costs) were $584.5 million, roughly flat year over year. Notably, the company’s revenues missed the Zacks Consensus Estimate of $594 million by 1.6%.
Backlog at the end of the quarter was $3.06 billion, reflecting growth of 9% from the year-ago figure.
Revenues from the U.S. Federal customers accounted for 30% of the quarter’s revenues. Conversely, the U.S. Commercial, and the U.S. State and Local sales accounted for 24% and 13% of the quarter’s revenues, respectively. International sales accounted for 33% of the quarter’s revenues.
The company reports revenues under the segments discussed below:
Net sales of Government Services Group were $321 million, up 1.6% year over year.
Revenues from Commercial / International Services Group totaled $263.5 million, reflecting a year-over-year decline of 3.8%.
Tetra Tech, Inc. Price, Consensus and EPS Surprise
Tetra Tech, Inc. price-consensus-eps-surprise-chart | Tetra Tech, Inc. Quote
Operating Margin
In the reported quarter, Tetra Tech’s subcontractor costs totaled $149.7 million, reflecting growth of 9.1% from the year-ago quarter. Other costs of revenues were $487.5 million, down 0.3% year over year. Selling, general and administrative expenses were $51 million, up 4.3% year over year.
Adjusted operating income in the reported quarter declined 3.5% year over year to $52.6 million and adjusted margin decreased 20 basis points to 9%.
Balance Sheet and Cash Flow
Exiting the fiscal second quarter, Tetra Tech had cash and cash equivalents of $135 million, down 11.8% from $120.7 million recorded at the end of fiscal 2019. Long-term debt was up 3.3% sequentially to $333 million.
In the first six months of fiscal 2020, the company generated net cash of $83.2 million from operating activities, down 16.1% from the year-ago comparable period. Capital expenditure was $5.9 million, down 18.1% year over year.
Shareholder-Friendly Policy
In the first six months of fiscal 2020, the company bought back shares worth $81.7 million and distributed dividends totaling $16.4 million.
Outlook
On uncertainties, regarding the impacts of the coronavirus outbreak on financial and operating results, Tetra Tech has withdrawn its revenue and earnings guidance for fiscal 2020.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks are Intellicheck, Inc. (IDN - Free Report) , ABB Ltd and Acco Brands Corporation (ACCO - Free Report) . All the companies presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intellicheck delivered a positive earnings surprise of 36.91%, on average, in the trailing four quarters.
ABB delivered a positive earnings surprise of 30.77%, on average, in the trailing four quarters.
Acco Brands delivered a positive earnings surprise of 19.04%, on average, in the trailing four quarters.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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