TPC Q1 Earnings Call: Backlog Hits Record, Project Execution Drives Outperformance

General contracting company Tutor Perini (NYSE:TPC) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 18.8% year on year to $1.25 billion. Its GAAP profit of $0.53 per share was significantly above analysts’ consensus estimates.

Is now the time to buy TPC? Find out in our full research report (it’s free).

StockStory’s Take

Tutor Perini's first quarter results were shaped by faster-than-expected ramp-up on several large projects and broad-based revenue gains across its Civil, Building, and Specialty Contractors segments. CEO Gary Smalley explained that growth was driven by “increased project execution activities on certain newer, higher-margin projects that all have substantial scope of work remaining,” with especially strong contributions from the Brooklyn Jail, the Honolulu Rail project, and mass transit initiatives in California. The company’s operating cash flow was also notable, as collections from ongoing projects contributed to a solid start to the year. Management described the quarter as “clean” with no significant project closeouts or dispute resolutions impacting earnings, highlighting disciplined project delivery and execution.

Looking forward, Tutor Perini’s updated guidance reflects continued confidence in its project pipeline and backlog conversion. Management emphasized that much of the company’s anticipated earnings growth in 2025 will be driven by the ramp-up of newer, higher-margin projects and a robust backlog of awarded contracts. Smalley stated, “We believe that this backlog will drive significant double-digit revenue growth and generate strong earnings for the foreseeable future while also serving as a catalyst for continued strong cash flow.” The company also noted contingency plans for potential risks, including project delays or lower win rates, but expects operating cash flow to remain healthy. Management reiterated that the majority of earnings for the year are expected in the second half, as newer projects accelerate and preconstruction work transitions to active construction.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to strong execution on recently awarded, higher-margin projects and a record backlog, while emphasizing operational improvements and selective bidding strategies.

• Large project ramp-ups: Revenue growth was led by the rapid start and progress on major new projects, such as the Brooklyn Jail and the Honolulu Rail Transit, with management highlighting that these projects have significant remaining scope and are expected to contribute meaningfully over several quarters.
• Backlog at all-time high: The company’s backlog reached $19.4 billion, nearly doubling year-over-year. This reflects successful new contract wins in transit, healthcare, and military infrastructure, including a $1.18 billion tunnel project in New York and extensive military construction in Guam.
• Improved project mix: Management stressed a strategic focus on bidding for projects with favorable contract terms, limited competition, and higher margins, which is expected to support both future revenue and profitability. The company’s selective approach is supported by the depth of its current backlog.
• Cash flow drivers: Operating cash flow was positive in the first quarter, driven by collections from new and ongoing projects rather than one-off dispute resolutions. Management expects further cash collections from dispute settlements later in the year.
• Indo-Pacific expansion: The Indo-Pacific, especially Guam, is a growing source of opportunities, with Tutor Perini and its subsidiary Platt Construction securing roles in multiple award construction contracts (MACCs) with a combined potential value exceeding $32 billion over eight years. The company anticipates continued growth in this region as U.S. military infrastructure spending remains strong.

Drivers of Future Performance

Tutor Perini’s outlook is anchored by the continued ramp-up of high-margin projects and sustained backlog growth, though management remains mindful of execution risks and external factors that could affect project timelines.

• Backlog conversion and project ramp: Management expects the current record backlog to drive revenue and earnings growth as newer projects transition from preconstruction into active execution, especially in the second half of the year. The company believes these projects, with improved contractual terms and higher margins, will underpin strong financial performance through 2027.
• Cash flow and capital allocation: With debt reduction nearly complete and operating cash flow expected to stay robust, management is considering shareholder returns, including potential dividends or share repurchases, pending further cash accumulation and Board approval. The company emphasizes a cautious approach, prioritizing long-term flexibility.
• Execution and external risks: Management identified risks such as project delays, lower-than-expected bid win rates, and possible adverse legal outcomes related to dispute resolutions. However, the company believes most major projects are insulated from funding or tariff risks, due to pre-committed funding and contract terms that mitigate commodity price fluctuations.

Catalysts in Upcoming Quarters

In the coming quarters, StockStory analysts will monitor (1) the rate at which preconstruction projects move into active construction and begin generating revenue, (2) the ability of Tutor Perini to maintain or grow its record backlog through successful contract bids, and (3) progress on cash collections from dispute resolutions and their effect on operating cash flow. Execution on large Indo-Pacific projects and the outcome of pending high-profile bids will also be important indicators.

Tutor Perini currently trades at a forward P/E ratio of 19.4×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

High Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.