Tutor Perini's Q2 backlog a record $8.7B
- In the general contractor's second-quarter 2018 earnings call, Tutor Perini Chairman and CEO Ronald Tutor said the company's backlog stood at a record $8.7 billion, a figure driven by $13 billion in new awards, according to a Seeking Alpha transcript of the call. The company's income for the three-month-period ending June 30 were $27.8 million, down 14.5% from the prior year's corresponding quarterly earnings of $32.6 million, according to the unaudited consolidated results of the parent company and its subsidiaries listed on Tutor Perini's website.
- Tutor reported that Tutor Perini and its subsidiaries had recently won several large projects — including the Purple Line Extension Section 3 Tunnels in Los Angeles ($410 million); the Broadway Bridge Rehabilitation project ($93 million); Visiting Quarters in Charleston, South Carolina ($53 million through Roy Anderson subsidiary); Los Angeles Department of Water and Power tunnel ($121 million through Frontier-Kemper subsidiary) — and is waiting on a notice to proceed for an $800 million contract for the $2 billion Southwest LRT project in Minneapolis. Tutor said work is plentiful for its specialty contractor subsidiaries, like WDF and Five Star Electric, nationwide.
- Tutor also said that despite the increased demand for construction services across the country, the company still limits its bidding efforts to large projects on which it can achieve its desired profit margins. The Tutor Perini chief said that owner-related project delays have affected its revenues, particularly the California High-Speed Rail Authority's $77 billion bullet train. However, Tutor said the company is increasing its workforce on the project and expects to be in "significant construction mode" by October. The company was able to negotiate a $63.6 million delay-related change order for the project back in 2016.
The company is facing new hurdles in California on the high-speed rail project and on a subway build currently underway in San Francisco.
In June, the rail authority ordered Tutor Perini to demolish a partially built bridge and redesign a new one because of quality issues and "signs of distress," according to the Los Angeles Times. Tutor told the Times that the rail organization had approved the original mechanically stabilized earth-wall design but changed its mind. The new bridge design will feature cast-in-place abutments. Engineers said earth-wall bridge structures are less expensive but have a higher rate of failure and that the area's weak soil would be stressed by such a bridge. The rail authority left 85% of the original bridge design duties up to Tutor Perini, a percentage that is relatively low compared to other publicly funded bridge projects.
On the San Francisco subway project, earlier this year, the Municipal Transportation Agency alleged that Tutor Perini and subcontractor Con-Quest Contractors installed the wrong type of rail track on more than three miles of the $1.6 billion project, according to the San Francisco Chronicle, and insisted that the two companies replace the rail and cover the costs. A subsequent San Francisco Examiner report indicated that the agency might have known about the type of rail Tutor Perini and Con-Quest planned to use as early as 2015.
Follow Kim Slowey on Twitter