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Bear of the Day: Tutor Perini (TPC)

Kevin Cook
Updated ·2-min read

I last wrote about Tutor Perini (TPC) as the Bear of the Day in November of 2021 when shares were trading near $15.

With a $275 million market cap, this diversified general contracting and global construction management firm topped $5.3 billion in revenues in 2020, but declining quarterly sales at the time, for the consecutive year, projected a drop below $4 billion going forward.

Fast-forward to early 2023 and the construction analysts had it pegged correctly. 2022 revenues came in under $3.8 billion and this year is forecast for barely 1% growth to $3.83 billion. Meanwhile, shares trade below $5.50 this year.

On the bottom line, the situation could be foreshadowing a recovery with the the 2022 loss of $-4.09 vaulting over 100% to a profit of $0.45.

While we wait to see if the trough has been seen for this builder -- especially given the recent tremors in regional banking and commercial real estate -- let's review the business model and segments of this small-cap engineer...

Tutor Perini operates in four segments: Civil, Building, Specialty Contractors, and Management Services.

The Civil segment engages in public works construction activities and the repair, replacement, and reconstruction of infrastructure.

The Building segment offers services in specialized building markets, including hospitality and gaming, transportation, healthcare, municipal offices, sports and entertainment, education, correctional facilities, biotech, pharmaceutical, industrial, and high technology.

The Specialty Contractors segment provides plumbing, HVAC, electrical, mechanical, and concrete services for the industrial, commercial, hospitality and gaming, and transportation markets.

The Management Services segment offers construction and design-build services to the U.S. military and government agencies, and multi-national corporations.

Bottom line for TPC: This smaller player may have been a canary in the coal mine of commercial real estate in 2022. Now it may become the harbinger of a bottom soon to come.

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