Tutor Perini Misses Revenue Estimates in Q4 Earnings

Tutor Perini (NYSE: TPC) reported its Q4 and full-year 2024 results, with revenue coming in below analyst estimates. The company's revenue miss can be attributed to several factors, including legacy dispute resolutions, increased share-based compensation expenses, and project mix and margins. Despite the revenue miss, Tutor Perini's strong operating cash flow and debt reduction efforts have significantly improved its financial flexibility. The company's record backlog of $18.7 billion, up 84% year-over-year, provides exceptional revenue visibility for the next several years. Tutor Perini's preliminary estimates for 2026 and 2027 suggest earnings more than double the 2025 guidance, indicating that newer, presumably higher-margin projects are expected to contribute to the company's growth in the long term.



Tutor Perini's revenue miss in Q4 can be attributed to several primary reasons:

1. Legacy dispute resolutions: The company reported a diluted loss of $3.13 per share, primarily due to charges related to legacy dispute resolutions. These settlements generated substantial cash but created short-term earnings pain. This factor impacted the company's bottom line but is expected to remove significant uncertainties from the business in the long run.
2. Share-based compensation: Another earnings headwind was the $40.4 million in share-based compensation, triggered by the stock price appreciation during 2024. This expense increased by $28.1 million compared to 2023, contributing to the revenue miss.
3. Project mix and margins: The company's revenue growth was driven by Civil and Building segment growth, but the project mix and margins may have been impacted by the resolution of legacy disputes and the increased share-based compensation expenses.



Despite the revenue miss in Q4, Tutor Perini's earnings performance over the past year has been relatively strong. The company reported earnings per share of $0.75 in 2023, up from $0.65 in 2022. This trend suggests that the company is making progress in improving its earnings performance, despite the challenges posed by legacy disputes.

In conclusion, while Tutor Perini's revenue miss in Q4 2024 was a departure from its historical trends, the company's strategic decision to resolve legacy disputes reflects its commitment to strengthening its financial position. The company's earnings performance over the past year has been relatively strong, and it is well-positioned to continue this trend in the future. Investors should monitor Tutor Perini's progress in resolving legacy disputes and its ability to secure new projects and maintain a healthy pipeline of opportunities.