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    TPC
    Earnings call· Mar 2026(Q1 FY26)

    TUTOR PERINI Q1 FY26 earnings call TPC

    May 6, 2026 Source

    Executive summary

    Tutor Perini Q1 FY26 — Record Operating Cash Flow and Strong Backlog

    Tutor Perini delivered a strong first quarter, marked by record operating cash flow and double-digit revenue growth, driven by increased project execution on higher-margin projects. The company affirmed its full-year adjusted EPS guidance, anticipating continued strong earnings and cash generation, despite an unfavorable legal ruling and increased share-based compensation. Management expressed increased confidence in 2027 earnings potential, underpinned by a robust $19.8 billion backlog and numerous significant bidding opportunities.

    Highlights

    5

    • Record operating cash flow of $147 million, up 542% year-over-year.

    • Revenue grew 11% year-over-year to $1.4 billion, the highest Q1 revenue since 2009.

    • Adjusted EPS of $1.03, up 58% year-over-year.

    • Civil segment operating income up 10% year-over-year to $88 million with a 12.6% operating margin, its highest ever Q1.

    • Net cash position of $404 million, $533 million better than a year ago.

    Concerns

    3

    • Unfavorable legal ruling assessed damages of approximately $175 million related to the W/Element Hotel project.

    • Operating income down 9% year-over-year to $59 million, primarily due to a $23 million increase in share-based compensation expense.

    • GAAP EPS decreased to $0.48 from $0.53 year-over-year.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year 2026 Adjusted EPS
    $4.90 to $5.30 per share
    high materiality
    High
    Full-year 2026 Revenue Growth
    double-digit growth
    high materiality
    High
    Full-year 2026 Operating Cash Generation
    strong
    medium materiality
    High
    Full-year 2027 Earnings
    even higher earnings expected
    high materiality
    High
    Civil Segment Operating Margin
    12% to 15%
    medium materiality
    High
    Building Segment Operating Margin
    3% to 6%
    medium materiality
    High
    Specialty Contractors Segment Operating Margin
    1% to 3%
    medium materiality
    Medium
    Specialty Contractors Segment Operating Margin
    5% to 8%
    medium materiality
    Medium
    Backlog Trajectory
    modest sequential backlog reduction in the near term, followed by resumed backlog growth
    high materiality
    High
    Midtown Bus Terminal Replacement Project Backlog Addition
    approximately $1 billion
    medium materiality
    High
    Senior Notes Refinancing
    refinancing our existing senior notes
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Civil
    Driven by increased project execution activities on projects with substantial scope of work remaining, including Midtown Bus Terminal Phase 1, Manhattan Tunnel, and Newark AirTrain replacement. Highest Q1 revenue ever for the segment.
    Operating income: $88 millionOperating income growth YoY: 10%Highest Q1 operating income ever
    		$698 million14%—12.6% operating margin
    Building
    Revenue growth expected to increase substantially later this year. Operating income increase driven by contributions from newer, higher-margin projects in New York and California, including Brooklyn and Manhattan Jail projects and a large healthcare campus project.
    Operating income growth YoY: 56%Operating margin YoY change: up from 2.3%
    		$473 millionslightly up—3.5% operating margin
    Specialty Contractors
    Growth primarily driven by increased activities on various electrical and mechanical projects in New York and Texas. Many projects are in early stages and expected to ramp up. Results were adversely affected by small immaterial unfavorable project adjustments related to legacy disputes.
    Operating income YoY change: up from $7 million lossMarginally profitable for the quarter
    		$219 million24%—approximately $600,000 operating income

    Operational metrics

    14
    Adjusted Net Income
    $55 millionup from $34 million YoY
    Q1 FY26

    Reflects high margin contribution and outstanding performance from projects in backlog.

    Adjusted Earnings Per Share
    $1.03up 58% year-over-year
    Q1 FY26

    Reflects high margin contribution and outstanding performance from projects in backlog.

    Share-based Compensation Expense
    $23 million increaseup from Q1 FY25
    Q1 FY26 vs Q1 FY25

    Primarily responsible for the 9% decrease in operating income.

    Corporate G&A Expense
    $45 millionup from $18 million last year
    Q1 FY26

    The increase was mostly due to the substantially higher share-based compensation expense.

    Effective Tax Rate
    30.1%up from 23.2% last year
    Q1 FY26

    Higher effective tax rate attributable to the significant increase in share-based compensation expense.

    Total Debt
    $399 millionpaid down
    Q1 FY26

    Continued payment down of total debt.

    Net Cash Position
    $404 million$533 million better than a year ago
    Q1 FY26

    A very strong net cash position, providing excellent capital allocation flexibility.

    Cash Available for General Corporate Purposes
    $321 millionup 18% compared to $271 million at end of 2025
    Q1 FY26

    Reflects the company's strong balance sheet.

    Share Repurchase Program Authorization
    $200 million
    Ongoing

    Program to return excess capital to shareholders.

    Shares Repurchased
    278,000 shares
    Q1 FY26

    Executed opportunistically on the open market.

    Quarterly Dividend
    $0.06 per share
    Q1 FY26

    First ever quarterly cash dividend authorized last November.

    Civil Segment Unfavorable Adjustment
    $16 million
    Q1 FY26

    Partially offset the increase in Civil segment operating income, but expected to generate significant cash once change orders are approved.

    Specialty Segment Backlog with TPC Subsidiaries
    approximately 2/3
    Q1 FY26

    Indicates internal project collaboration.

    Senior Notes Refinancing Interest Savings Target
    400 to 500 basis points
    Future

    Expected from refinancing existing senior notes around midyear.

    Industry KPIs

    2
    MetricValueDetails
    Total backlog$19.8 billionUSD
    End market pipeline—

    Orderbook & backlog

    3
    Total Backlog$19.8 billionend of Q1 FY26

    remains very strong

    Expected to fuel much higher revenue and earnings, increased profitability and continued strong cash flow this year and beyond. Provides excellent visibility for future revenue and earnings over the next several years.

    New Awards and Contract Adjustmentsnearly $700 millionQ1 FY26

    Largest additions include $186 million for Eagle Mountain Casino Phase 2, $97 million for a healthcare project, and $66 million for two mass-transit projects, all in California.

    Black Construction Backlogexceeds $1 billionQ1 FY26

    Some work is 2-3 years in duration, others 4-5 years. Expected to grow significantly.

    Deals & partnerships

    4
    CustomerAdditional funding for Eagle Mountain Casino Phase 2 expansion project$186 million

    Largest addition to backlog in Q1, located in California.

    CustomerAdditional funding for a healthcare project that entered the construction phase$97 million

    Largest addition to backlog in Q1, located in California.

    CustomerTwo mass-transit projectsapproximately $66 million

    Largest addition to backlog in Q1, located in California.

    U.S. Army CorpsMATOC award to support energy resilience and conservation investment program$2 billion

    All of the $2 billion is within TPC's addressable business, covering building, civil, and specialty work.

    Risks & headwinds

    4
    Unfavorable legal ruling for W/Element Hotel projectQ1 FY26 (ruling received last month)

    approximately $175 million in damages

    Mitigation: Company strongly disagrees with the ruling, intends to appeal, and will vigorously pursue all appropriate legal remedies. Appeal process likely to take 2 years or longer. Immaterial charge to earnings recognized in Q1.

    Increased Share-based Compensation ExpenseQ1 FY26

    $23 million increase year-over-year

    Mitigation: Company is no longer awarding liability-classified awards, which should meaningfully reduce earnings volatility starting next year. Expense expected to decrease in 2026 and decline much more significantly in 2027 as awards vest.

    Contingency for Unknown Outcomes in 2026 GuidanceFY26

    significant amount of contingency

    Mitigation: Guidance factors in potential for lower-than-anticipated success rate for future project pursuits, project delays, slower ramp-ups for newer projects, and unexpected settlements/adverse legal decisions.

    Legacy Disputes in Specialty Contractors SegmentQ1 FY26

    handful of small immaterial unfavorable project adjustments

    Mitigation: Expected to be resolved, with segment margins ultimately reaching 5-8% from current 1-3% range.

    What to watch in Q2 FY26

    5

    Specialty Contractors Segment Operating Margin

    next quarter and beyond in FY26
    Currentapproximately $600,000 (marginally profitable)
    Targetimprovement towards 1% to 3% range

    Why it matters

    The segment is expected to improve profitability as the year unfolds, with many projects in early stages ramping up. This is key to overall earnings growth.

    The Specialty Contractors segment continues to deliver solid execution on its current projects and improved operating results as evidenced by the fact that they were marginally profitable for the quarter with further improvement still expected as the year unfolds.

    Q&A highlights

    7

    How does the company balance the numerous large project opportunities with its capacity, especially considering potential roll-offs and the significant opportunities in the Pacific region (Guam)?

    Management assured that they only pursue projects they can handle, with resources available from winding-down work. They expect a net increase in backlog due to the abundance of opportunities, particularly in the Pacific, and are well-positioned to win a fair share without being constrained by capacity.

    “If I would look at what's out there and what we would expect to book, provided we get anywhere close to our fair share, I would say that it's going to be by far a net add.”

    asked by Michael Dudas · answered by Gary Smalley

    2 min read7 chapters

    Detailed Narrative

    01

    Tragic Incident and Support

    The company reported the capsizing of its offshore cargo vessel, the Mariana, during Super Typhoon Sinlaku, resulting in the loss of six crew members, including two Tutor Perini employees. Management expressed condolences and committed to supporting the affected families, acknowledging the efforts of search and rescue teams.

    02

    Strong Q1 Performance Drivers

    First quarter results were highlighted by record operating cash flow of $147 million and 11% year-over-year revenue growth to $1.4 billion, the highest Q1 revenue since 2009. This performance was driven by increased project execution on larger, higher-margin Civil and Building segment projects, particularly in the Northeast, including the Midtown Bus Terminal Phase 1, Manhattan Tunnel, Manhattan Jail, and Newark AirTrain replacement projects.

    03

    Robust Backlog and Future Opportunities

    The company's backlog remains strong at $19.8 billion, providing excellent visibility for future revenue and earnings. New awards of nearly $700 million were booked in Q1, primarily in California. Management detailed numerous significant bidding opportunities totaling over $20 billion across the Northeast, Midwest, West Coast, and Indo-Pacific regions, including multibillion-dollar projects like Penn Station transformation, California high-speed rail, and the Sepulveda Transit Corridor.

    04

    Capital Allocation and Shareholder Returns

    Tutor Perini's Board declared another $0.06 quarterly dividend. In Q1, the company completed the first repurchase under its $200 million share repurchase program, buying back approximately 278,000 shares for $20 million at an average price of $72 per share. Management plans additional opportunistic buybacks, balancing them with cash needs and the company's strong cash balances.

    05

    W/Element Hotel Legal Dispute

    The company received an unfavorable legal ruling assessing approximately $175 million in damages related to the W/Element Hotel project. Tutor Perini strongly disagrees with the ruling, intends to appeal, and will pursue all legal remedies to defend against the damages and collect contractually due amounts. An immaterial charge to earnings was recognized in Q1 due to this development.

    06

    Balance Sheet Strength and Refinancing

    The company achieved a net cash position of $404 million, exceeding total debt by that amount, which is $533 million better than a year ago. This strong balance sheet provides capital allocation flexibility. Management anticipates refinancing existing senior notes around midyear to secure more favorable interest rates (targeting a "6 handle" vs current high rates) and extend debt maturities, expecting substantially reduced interest expense.

    07

    Inflation Management and Competition

    Management stated that the company is well-covered against inflation, utilizing conservative contingency planning and early buyout strategies to firm up commitments with subcontractors and vendors. The competitive landscape is seen as stable or decreasing due to the high volume of work and the specialized nature of complex projects, with no new competitors expected in the market.

    AI-generated summary of the company’s earnings call. Not investment advice.