Tetra Tech, Inc. Keeps Earnings-Beat Streak Alive With Record Q4 & 2019 Results

Tetra Tech, Inc. Keeps Earnings-Beat Streak Alive
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Tetra Tech, Inc. Tops Earnings Estimates For 4th Consecutive Quarter

Tetra Tech, Inc. (NASDAQ:TTEK) continues to surprise and impress Wall Street. The company reported not just record fourth-quarter and fiscal 2019 results, but kept its earnings-beat streak alive over the last four quarters.

Tetra Tech stock is up 73% in 2019 at the time of this writing, and its impressive growth should continue well into 2020.

Why? The company reported record-high revenue, earnings per share (EPS), order backlog, and cash from operations. This record growth has been fueled at an organic double-digit rate for more than three years now.

Furthermore, the company has also expanded its global footprint into the U.K.

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All that has allowed management at Tetra Tech, Inc. to provide strong guidance for fiscal 2020.

TTEK Stock Overview

The name Tetra Tech may sound like a company that makes juice boxes, but it doesn’t. The Pasadena, California-based company provides consulting and engineering services through 450 offices worldwide. (Source: “About Us,” Tetra Tech, Inc., last accessed November 15, 2019.)

The company provides government and commercial clients with solutions focused on water, the environment, resource management, energy, infrastructure, and international development.

In early October, Tetra Tech was awarded a $500.0-million, five-year global energy contract from the U.S. Agency for International Development. (Source: “Tetra Tech Wins $500 Million USAID Global Energy Contract,” Tetra Tech, Inc., October 9, 2019.)

Also in October, the company announced it was awarded a $30.0-million water supply management contract from the government of Mongolia. (Source: “Tetra Tech Awarded $30 Million Mongolia Water Supply Program Management Contract,”  Tetra Tech, Inc., October 21, 2019.)

Then, at the end of October, Tetra Tech was awarded a $40.0-million contract from the U.S. Army Corps of Engineers, Albuquerque District. The contract focuses on flood-risk management and erosion protection, mostly in the southwestern United States. (Source: “Tetra Tech Wins $40M USACE Flood Risk Management Contract,” Tetra Tech, Inc., October 28, 2019.)

TTEK Stock Information

Market Cap $4.7 Billion
52-Week Change 36.6%
52-Week High $90.34
52-Week Low $48.52
Shares Outstanding 54.65 Million
Float 53.95 Million
50-Day Moving Average $86.42
200-Day Moving Average $79.12

(Source: “Tetra Tech, Inc. (TTECH),” Yahoo! Finance, last accessed November 15, 2019.)

Record Fourth-Quarter Earnings Beat

On November 13, Tetra Tech announced its financial results for the fourth quarter and fiscal 2019 ended September 29, 2019.

The company announced that its fourth-quarter revenue climbed 14% year-over-year to a record $842.0 million. Net revenue, on an adjusted basis, was also up 14% at $640.0 million. (Source: “Tetra Tech Reports Record Fourth Quarter and Fiscal 2019 Results,” Tetra Tech, Inc, November 13, 2019.)

Tetra Tech reported fourth-quarter EPS of $0.21. Its adjusted EPS increased by 17% year-over-year to $0.88, surpassing analyst estimates.

The company’s order backlog at the end of the fourth quarter was up 16% year-over-year, at a record $3.1 billion.

Tetra Tech’s revenue for fiscal 2019 was up five percent year-over-year at $3.1 billion, while net revenue grew nine percent to $2.4 billion.

Full-year diluted EPS was $2.84, a 17% increase from the EPS of $2.42 in fiscal 2018. Adjusted EPS for fiscal 2019 totaled $3.17, up 20% from fiscal 2018.

Cash generated from operations came in at a record $209.0 million, up 12% from the same period last year.

For income-starved investors, on November 11, Tetra Tech’s board of directors declared a $0.15 dividend per share, payable on December 13 to shareholders of record as of December 2.

Also during the fourth quarter, Tetra Tech repurchased $25.0 million of its own shares. As of September 29, it had $125.0 million remaining in its share repurchase program.

Guidance

For the first quarter of fiscal 2020 ended December 31, 2019, Tetra Tech, Inc. expects its net revenue to be in the range of $600.0 to $640.0 million.

Also for the first quarter, the company expects its diluted EPS to be in the range of $0.75 to $0.80.

For full-year fiscal 2020, Tetra Tech expects to report net revenue in the range of $2.4 to $2.6 billion and diluted EPS in the range of $3.35 to $3.55.

Analyst Take

Tetra Tech, Inc. had a great fiscal 2019, reporting record financial results. Those results included four consecutive quarters during which the company topped Wall Street’s earnings expectations.

Will the good times continue? Impossible to say for sure, but Tetra Tech did provide positive first-quarter revenue guidance which, at the midpoint is expected to advance 16%, and modest first-quarter diluted EPS guidance of three percent.

If history is any indicator, the company could top these estimates, which would likely result in higher Tetra Tech stock prices.