On July 31, 2024, Tetra Tech Inc (TTEK, Financial) released its 8-K filing for the third quarter ended June 30, 2024. The company, a leading provider of high-end consulting and engineering services in water, environment, and sustainable infrastructure, reported record quarterly revenue and an all-time high backlog.
Company Overview
Tetra Tech Inc provides consulting and engineering services for environmental, infrastructure, resource management, energy, and international development markets. It specializes in providing water-related services for public and private clients. The company operates through two reportable segments: Government Services Group (GSG) and Commercial/International Services Group (CIG).
Third Quarter Highlights
Tetra Tech Inc reported revenue of $1.34 billion for the third quarter, surpassing the analyst estimate of $1.08 billion. The company's earnings per share (EPS) came in at $1.59, exceeding the estimated $1.55. This strong performance was driven by increasing demand for high-end water, environment, and sustainable infrastructure services.
Financial Achievements
The company achieved a gross profit of $223.17 million, up from $188.85 million in the same period last year. Operating income rose to $128.63 million from $97.68 million, reflecting a significant improvement in profitability. Tetra Tech's net income attributable to shareholders was $85.81 million, compared to $60.24 million in the previous year.
Key Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $1.34 billion | $1.21 billion |
| Gross Profit | $223.17 million | $188.85 million |
| Operating Income | $128.63 million | $97.68 million |
| Net Income | $85.81 million | $60.24 million |
| EPS | $1.59 | $1.12 |
Executive Commentary
Dan Batrack, Chairman and CEO, commented, “Tetra Tech continued our strong performance through the third quarter with increasing demand for our high-end water, environment, and sustainable infrastructure services, resulting in record quarterly revenue and an all-time high backlog. We continued to grow our services for front-end advisory and consulting work, resulting in the expansion of our margins in GSG by 60 basis points and CIG by 230 basis points over the third quarter of last year. With increased profitability and record backlog, we are raising our full year guidance for net revenue and earnings, which represents forecasted EPS growth of 23% for fiscal 2024.”
Dividend and Share Repurchase Program
On July 29, 2024, Tetra Tech’s Board of Directors approved the company’s 41st consecutive quarterly dividend at an amount of $0.29 per share, a 12% increase year-over-year, payable on August 30, 2024. The company also has $348 million remaining under its $400 million share repurchase program.
Five-for-One Stock Split
Tetra Tech’s Board of Directors approved a five-for-one stock split of the company’s common stock, effective after the close of trading on September 6, 2024. This move is intended to make shares more accessible to a broader base of investors and enhance liquidity in the trading of the company’s shares.
Nine-Month Results
For the nine-month period, Tetra Tech reported revenue of $3.82 billion and net revenue of $3.18 billion, up 17% and 18%, respectively, over the same period in fiscal 2023. Operating income was $357 million, up 43%, and EPS was $4.40, up from $4.10 in the same period last year.
Business Outlook
For fiscal 2024, Tetra Tech is raising its EPS guidance to a range of $6.23 to $6.28, an increase of 23% at the midpoint year-over-year. The company is also raising its net revenue guidance to a range of $4.27 billion to $4.32 billion, an increase of 15% at the midpoint year-over-year. For the fourth quarter of fiscal 2024, Tetra Tech expects EPS to range from $1.82 to $1.87 and net revenue to range from $1.09 billion to $1.14 billion.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Tetra Tech Inc for further details.
