Tutor Perini closes out 2019 with stable revenue, net loss

Dive Brief:

General contractor Tutor Perini posted a $387.7 million net loss for the full-year 2019 and a net loss of $86.1 million for the fourth quarter, the company reported in a press release and an earnings call with analysts on Wednesday. Despite both quarterly and full-year gross revenue that was comparable to the immediate previous periods, both the fourth quarter and 2019 were negatively impacted by a $123.9 million charge related to the Alaskan Way Viaduct (SR(99) Replacement project in Seattle and a pre-tax, non-cash goodwill impairment charge of $379.9 million attributable to a decrease in Tutor Perini's stock price announced in the second quarter.
Although revenue from the company's civil segment increased 12% in 2019, it was offset by the SR99 charge, the result of an adverse jury verdict in a case against the Washington DOT that Tutor Perini said it will appeal. Negative adjustments on projects in Tutor Perini's specialty contractor business impacted the company's profit by $41.5 million.
At the end of 2019, Tutor Perini's backlog was at $11.2 billion, almost a record for the company and 21% higher than the $9.3 billion that closed out 2018. The backlog includes the $432 million Division 20 Portal Widening and Turnback Facility in downtown Los Angeles; more than $375 million in electrical and mechanical projects; and the $263 million Miami-Dade County Courthouse in Miami.

Dive Insight:

Ronald Tutor, company chairman and CEO, said he was disappointed in the specialty group's losses in the fourth quarter but that continuous changes and improvements in that unit should translate to better outcomes in 2020. In August, as part of Tutor Perini's second-quarter earnings report, Tutor announced that Jean Abiassi, former president and COO of Zachry Construction Corp., would take over as president and CEO of both the company's building and specialty contractors groups.

During the earnings call, Tutor gave an update on the progress of two of the largest projects it's involved in, the California High-Speed Rail Authority's bullet train and the Los Angeles Metro's Purple Line 2 and 3, all of which are collectively worth $5 billion to Tutor Perini. Tutor said its bullet train contract has doubled as the result of contract extensions and that the company is seeking payment for additional delays. The company's portion of the work should be in full swing by June, he said.

The Purple Line contracts are progressing and still within budget. Construction on the Purple Line 3 stations could start as early as the end of 2020.

Tutor said the company is in the rare position of being able to take on very large civil projects and said it is on the shortlist of contractors that will be able to bid on the $1.2 billion Metro-North Penn Station Access project in New York City and have been prequalified to compete for the Sepulveda Transit Corridor project in Los Angeles. Tutor estimated that the Sepulveda project could be worth up to $7 billion.

Other $1 billion-plus projects the company has in its sights are the $2 billion AirTrain at Newark Liberty International Airport in Newark, New Jersey; the $1.5 billion Honolulu Rail Transit project in Hawaii; the $2.5 billion Silicon Valley Extension for Bay Area Rapid Transit in the San Francisco area; and a $2 billion landside roadway development at John F. Kennedy Airport in New York City.