Tetra Tech (TTEK) Tops Q2 EPS by 3c, Beats on Revenues; Boosts FY18 EPS/Revenue Guidance

Tetra Tech (NASDAQ: TTEK) reported Q2 EPS of $0.54, $0.03 better than the analyst estimate of $0.51. Revenue for the quarter came in at $699 million versus the consensus estimate of $509.18 million.

• EPS $0.51; Ongoing EPS $0.54, up 13% Y/Y
• Increased quarterly dividend to $0.12 per share, up 20%
• Increasing net revenue guidance for FY18; midpoint up 8% Y/Y
• Increasing EPS guidance for FY18; midpoint up 20% Y/Y

Second Quarter Results

For the second quarter, Tetra Tech’s results exceeded net revenue and diluted earnings per share (EPS) guidance. Revenue in the second quarter totaled $700 million. For ongoing1 operations, revenue totaled $699 million, and revenue, net of subcontractor costs2 (net revenue), was $533 million. Operating income for the second quarter was $43 million, and on an ongoing basis totaled $45 million. EPS was $0.51, and on an ongoing basis totaled $0.54, up 13% year-over-year. Backlog at the end of the quarter was $2.5 billion.

Comments on Results

Tetra Tech’s Chairman and CEO, Dan Batrack, commented, “Tetra Tech had a very strong second quarter and record first half of the year results, exceeding the high end of our guidance range for both net revenue and earnings. Our broad-based growth has been led by work for U.S. state and local clients, which has increased organically at a double-digit rate for seven consecutive quarters, including 30% growth in the second quarter. With the recent 2018 U.S. Federal spending bill in place, we have more visibility for the remainder of 2018. Given the strength of our results and outlook, we are increasing our guidance for both EPS and net revenue for fiscal 2018.”

Business Outlook

Tetra Tech expects ongoing EPS for the third quarter of fiscal 2018 to range from $0.62 to $0.68. Net revenue for the third quarter is expected to range from $525 million to $555 million. For fiscal 2018, Tetra Tech is increasing guidance and now expects ongoing EPS to range from $2.50 to $2.62 and net revenue to range from $2.15 billion to $2.25 billion.

GUIDANCE:

Tetra Tech sees FY2018 EPS of $2.50-$2.62, versus the consensus of $2.50. Tetra Tech sees FY2018 revenue of $2.15-2.25 billion, versus the consensus of $2.13 billion.

For earnings history and earnings-related data on Tetra Tech (TTEK) click here.

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