Tutor Perini TPC is a small-cap construction company with a diverse, global business that topped $5.3 billion in revenues in 2020, but declining quarterly sales for the past year.
Last week, TPC delivered disappointing Q3 results with EPS of $0.30, missing the Zacks Consensus Estimate of $0.62 by over 50%. This compares to earnings of $0.72 per share a year ago.
Tutor Perini posted revenues of $1.18 billion for the quarter ended September 2021, missing the Zacks Consensus Estimate by over 7%. This compares to year-ago revenues of $1.44 billion. The company has topped consensus revenue estimates just once over the last four quarters.
This big miss on the top and bottom lines obviously caught analysts off-guard since the company had surpassed consensus EPS estimates three times prior. As a result, analysts had to take down this year’s profit projection from $2.09 to $1.74.
But even more significantly, in reaction to this report and business outlook, analysts revised EPS estimates down 8.5% for next year from $2.25 to $2.09.
Tutor Perini operates in four segments: Civil, Building, Specialty Contractors, and Management Services, and belongs to the Zacks Heavy Construction industry, which currently ranks in the bottom quartile of all industries.
Not only is this a cyclical industry heavily dependent on economic ups and downs, it was heavily disrupted by the global pandemic.
With interest rates still offering prime stimulation to construction, TPC shares appear to be holding up well above $12.
And to me, that’s another sign that no recession is in sight.
Bottom line: If TPC can turn around the sales slump, the company appears to offer value trading at only 0.15 times sales — an incredibly attractive price/sales ratio. But we have to see the growth resume. The Zacks Rank will let you know.
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