Tutor Perini Corporation's Strong Performance in Q2 2025: Miller Value Deep Value Strategy's Perspective

Miller Value Partners' Deep Value Strategy highlighted Tutor Perini Corporation (TPC) as a top performer in Q2 2025, with shares up 83%. The company was initially purchased in 2022 at $7/share, a deep discount to tangible book value, and has since rebuilt its pipeline, enhanced its balance sheet, and is on track to return to normalized profitability. TPC is currently trading over two times book value and approaching 10x normalized earnings. The strategy exited the position and recycled capital to holdings with greater long-term return potential.

Tutor Perini Corporation (TPC) reported a strong second quarter in 2025, with significant improvements in financial performance and a robust pipeline of projects. The company's shares surged 83% during the quarter, leading Miller Value Partners to exit the position and recycle capital into other holdings with greater long-term return potential [2].

CEO Gary G. Smalley highlighted an "outstanding second quarter," setting new records across various metrics. The company's operating cash flow reached $262 million for the quarter and $285 million year-to-date, both record figures. The backlog reached a new all-time record of $21.1 billion, up 102% year-over-year and 9% sequentially, driven by $3.1 billion in new awards [1].

Revenue for the second quarter was $1.37 billion, up 22% from last year. The Civil segment delivered record operating income, while the Building segment had its best performance since 2011. Smalley attributed the strong performance to higher-margin projects and favorable adjustments from change orders [1].

Management also raised guidance for the second time in 2025. The GAAP EPS for 2025 is now expected to be in the range of $1.70 to $2.00, up from the previous guidance of $1.60 to $1.95. Adjusted EPS for 2025 is expected in the range of $3.65 to $3.95 [1].

The outlook for backlog remains strong, with a "full pipeline of opportunities" expected to support continued growth. Management indicated that both GAAP EPS and adjusted EPS in 2026 and 2027 will be significantly higher than the upper end of the increased guidance for 2025 [1].

Despite the strong performance, management noted higher share-based compensation expense and its impact on earnings. However, they stated that this expense is projected to decrease considerably in 2026 and further in 2027 [1].

The company's financial health is evident in its cash position. As of June 30, 2025, total debt was $419 million, with cash at $526 million, making cash exceed total debt by $107 million for the first time since 2010 [1].

Looking ahead, Tutor Perini continues to focus on project selectivity, sustainability of margins, and capital allocation. The company is confident in its ability to navigate regulatory shifts and competitive dynamics, positioning itself for continued growth in earnings, cash flow, and shareholder value creation.

References:

[1] https://seekingalpha.com/news/4480817-tutor-perini-raises-2025-eps-guidance-to-1_70-2_00-as-record-21_1b-backlog-supports-outlook
[2] https://seekingalpha.com/article/4810969-stocks-that-shaped-millers-q2-2025-deep-value-strategy