Tutor Perini JV Wins Excavation Project - Analyst Blog

Tutor Perini Corporation TPC recently announced that a joint venture (JV) between its subsidiary, Frontier-Kemper Constructors, and ASL has secured a contract from Aecon/SNC-Lavalin Constructors JV for the underground excavation work in British Columbia.

Shares of Tutor Perini reached a new 52-week high of $30.04 on March 21, up from its previous high of $29.86 on March 20. The leading civil and building construction company has delivered a robust 1-year return of about 58.4% and year-to-date return of about 13.5%, outperforming the S&P 500.

This John Hart Generating Station replacement project includes excavation of the powerhouse, gate chamber, intake shaft, power tunnel, tailrace, and various access tunnels. In this Frontier-Kemper/ASL partnership, Frontier-Kemper's share of the contract value is around $64.6 million (CAD$71.5 million).

The contract will be the fourth major project of Tutor Perini in British Columbia in the past eight years. Construction work is scheduled to begin this year and will expectedly conclude by the end of 2017. Tutor Perini intends to book the value of the contract into the backlog in first-quarter 2014.

Tutor Perini reported adjusted earnings per share of 68 cents in the fourth quarter, a 3% year-over-year increase. Fiscal 2013 earnings per share improved 23% year over year to $1.80.

Total backlog as of 2013-end, was $7 billion, up 25% year over year. In the quarter, additions to backlog worth mentioning were a $510 million platform project at Hudson Yards in New York City, the company's approximately $200 million share of the St. Croix Crossing bridge project connecting Oak Park Heights, MN and St. Joseph, WI, a $61 million mixed-use building development project in New Orleans, LA, and a $41 million landfill closure and sewer improvement project in Guam.

Tutor Perini expects earnings per share to range between $2.20 and $2.40 in 2014. Revenues are expected in the range of $4.5–$5 billion.

The company continues to win contracts and has prospects of receiving future contracts, given the significant volume of pending deals in the market. Building segments and margins are also expected to grow over the next year, driven primarily by the additional phases of the Hudson Yards projects.

Sylmar, CA-based Tutor Perini Corporation is a leading civil and building construction company that offers diversified general contracting and design-build services to private clients and public agencies globally.

Tutor Perini currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same industry include India Globalization Capital, Inc. IGC, MasTec, Inc. MTZ and USG Corp. USG.  All of these have a Zacks Rank #2 (Buy).