Inve US ▾
TPTPC

Tutor Perini (TPC) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· May 6, 2026

Source: earnings call transcript

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

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

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

TPC operating KPIs by quarter

TPC operating KPIs stated on its earnings calls, by fiscal quarter
KPI Dec 2025 Q4 FY25This call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Backlog
$20.6B We concluded 2025 with a robust backlog of $20.6 billion, up 10% year-over-year and had a solid book-to-burn ratio of 1.34x for the year. Source: earnings call transcript
$19.8B Our backlog remains very strong at $19.8 billion at the end of the first quarter, and we continue to expect that it will fuel much higher revenue and earnings, increased profitability and continued strong cash flow this year and beyond. Source: earnings call transcript
$19.9B We booked $1.7 billion of new awards and contract adjustments, a book-to-burn of just over 1x, and finished the quarter again with a near-record backlog of $19.9 billion, up slightly compared to the prior quarter. Source: earnings call transcript
+0.5%
Orders —
<$700M In the first quarter, we booked nearly $700 million of new awards and contract adjustments. Source: earnings call transcript
$1.7B We booked $1.7 billion of new awards and contract adjustments, a book-to-burn of just over 1x, and finished the quarter again with a near-record backlog of $19.9 billion, up slightly compared to the prior quarter. Source: earnings call transcript
—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Total Backlog $19.8 billion end 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 Adjustments nearly $700 million Q1 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 Backlog exceeds $1 billion Q1 FY26

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

Deals & partnerships

Customer Additional funding for Eagle Mountain Casino Phase 2 expansion project $186 million

Largest addition to backlog in Q1, located in California.

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

Largest addition to backlog in Q1, located in California.

Customer Two mass-transit projects approximately $66 million

Largest addition to backlog in Q1, located in California.

U.S. Army Corps MATOC 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

Unfavorable legal ruling for W/Element Hotel project Q1 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 Expense Q1 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 Guidance FY26

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 Segment Q1 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

Specialty Contractors Segment Operating Margin

next quarter and beyond in FY26
Current approximately $600,000 (marginally profitable)
Target improvement 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.

Find out whether TPC delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 7 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.