Tutor Perini raises 2025 EPS guidance to $1.70–$2.00 as record $21.1B backlog supports outlook
Aug. 06, 2025 8:09 PM ET
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Earnings Call Insights: Tutor Perini Corporation (TPC) Q2 2025
Management View- CEO Gary G. Smalley highlighted an "outstanding second quarter, one of our best quarters ever, setting new records across various metrics." He reported operating cash flow of $262 million for the quarter and $285 million year-to-date, both record figures, and described second quarter cash flow as "the second best for any quarter in the history of the company."
- Backlog reached a new all-time record of $21.1 billion, up 102% year-over-year and 9% sequentially. Smalley attributed this growth to $3.1 billion in new awards, including the $1.87 billion Midtown Bus Terminal Replacement Phase 1 project in New York and a $538 million health care project in California.
- 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. "Operating income was up 89% to $76 million, reflecting strong operating performance and contributions from higher-margin projects," Smalley stated.
- Smalley announced a change in reporting: "Starting this quarter, we have elected to report adjusted earnings, which exclude the impact of share-based compensation expense, net of associated tax benefit."
- Smalley also raised guidance for the second time in 2025: "Our GAAP EPS for 2025 is now expected to be in the range of $1.70 to $2, 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."
- CFO Ryan Joseph Soroka stated, "For the second quarter of 2025, net income attributable to Tutor Perini was $20 million or $0.38 of earnings per share, up substantially compared to $1 million or $0.02 of earnings per share for last year's second quarter."
Outlook- Management increased GAAP EPS guidance for 2025 to $1.70–$2.00 and introduced adjusted EPS guidance of $3.65–$3.95. Smalley emphasized that "our increased guidance continues to factor in a significant amount of contingency for various remaining unknown or unexpected outcomes and developments in 2025."
- Looking forward, management indicated, "We anticipate that both our GAAP EPS and adjusted EPS in 2026 and 2027 will be significantly higher than the upper end of our increased guidance for 2025."
- The outlook for backlog remains strong, with a "full pipeline of opportunities" expected to support continued growth.
Financial Results- Second quarter revenue was $1.37 billion. Civil segment revenue reached $734 million, Building segment revenue was $462 million, and Specialty Contractors revenue was $177 million.
- Civil segment income from construction operations was $140 million, up 85% compared to last year, with favorable adjustments of $28 million from change orders and improved project performance.
- Building segment income from construction operations was $22 million, up from $5 million last year.
- Specialty Contractors segment posted a loss of $18 million, which management attributed to unfavorable adjustments related to legacy claims.
- Operating cash flow for the quarter was $262 million. 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.
- G&A expense for 2025 is now expected to be $360–$380 million, driven by higher share-based compensation. Interest expense for 2025 is projected at $55 million, down from $89 million in 2024.
Q&A- Michael Stephan Dudas, Vertical Research Partners: Asked about major project closeouts and win rates for new business. Smalley responded, "It's not really about projects wrapping up for us at this point. It's about projects starting up, ramping up and generating even more revenue and profit and cash than what they've done so far." Executive Chairman Ronald N. Tutor added, "There's only 2 jobs of any consequence that are in the final stages...any reduction in revenue on those 2 jobs...is more than offset by the tremendous ramping up of all of these new jobs."
- Adam Robert Thalhimer, Thompson, Davis: Asked about the project funnel and selectivity. Smalley said, "We can be even more selective than we have been in the past...there are significant opportunities out there. We'll be selective. We will be -- look for those projects that geographically make the most sense for us and where we can get higher margins with less competition."
- Steven Michael Fisher, UBS: Questioned the drivers of guidance change and Civil segment margin expectations. Smalley explained, "Civil is going to continue to drive the company's results...we're probably up to 15% now for Civil segment margin, where years ago, we were 8% to 10%, then we're 10% to 12%."
- Liam Dalton Burke, B. Riley: Inquired about competitive dynamics and federal support for transit. Tutor responded, "We have never seen more than 1 other bidder in the last 2 years. And on 1 occasion -- 2 occasions, we were the only bidder. So yes, nothing's changed. The competition is minimal."
Sentiment Analysis- Analysts maintained a positive tone, frequently offering congratulations and focusing on sustainability of growth, project pipeline, and capital allocation. Questions probed the durability of cash flow, project selectivity, and competitive landscape, but reflected confidence in management's execution.
- Management's tone was confident and assertive, with numerous references to record results and strong forward momentum. Quotes such as, "we know that we still have a long way to go, but I think you can see the exceptional progress," exemplified the upbeat outlook. Compared to last quarter, management appeared even more optimistic, highlighting the doubling of the stock price and repeated increases in guidance.
Quarter-over-Quarter Comparison- GAAP EPS guidance increased from $1.60–$1.95 to $1.70–$2.00, and adjusted EPS guidance was introduced at $3.65–$3.95.
- Backlog rose from $19.4 billion in Q1 to $21.1 billion in Q2, with a higher sequential growth rate and substantial new awards.
- Second quarter operating cash flow surged to $262 million from $23 million in Q1, and cash exceeded total debt for the first time since 2010.
- Management's outlook became more assertive, with greater emphasis on sustained growth and selective bidding, while analyst questions continued to focus on project execution, margin sustainability, and capital deployment.
Risks and Concerns- Management noted higher share-based compensation expense and its impact on earnings, but stated that "it is projected to decrease considerably in 2026 and further in 2027."
- Contingency was built into guidance for "potential for slower ramp-ups on our newer projects, project delays for existing and prospective work, lower-than-expected win rates for future bids, higher than currently anticipated share-based compensation expense and settlements or adverse legal decisions."
- No significant tariff or funding risks were identified; management reported that "our project is funded and authorized and is not expected to be adversely impacted" by federal funding reductions.
Final Takeaway
Management underscored record-setting results for the second quarter, including new highs in revenue, operating income, and backlog, as well as a significant increase in guidance for 2025 EPS. The company highlighted robust operating cash flow, a strong pipeline of major projects, and a favorable competitive environment with minimal bidding pressure. With contingency built into guidance and ongoing strength in project execution, the outlook remains confident for continued growth in earnings, cash flow, and shareholder value creation.
Read the full Earnings Call Transcript |
