Tetra Tech Q1 Earnings & Revenues Top Estimates, Increase Y/Y

Tetra Tech, Inc. TTEK reported first-quarter fiscal 2025 (ended Dec. 29, 2024) adjusted earnings of 35 cents per share, which surpassed the Zacks Consensus Estimate of 34 cents. The company’s adjusted earnings per share surpassed the management’s guided range of 32-34 cents. The bottom line surged 25% year over year, driven by the strong momentum in each of its segments.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.TTEK’s Revenue & Segmental PerformanceTetra Tech generated revenues of $1.42 billion, reflecting a year-over-year increase of 16%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.2 billion, up 18% year over year. The quarterly top line surpassed the management’s guided range of $1.09-$1.15 billion.Tetra Tech’s adjusted net revenues also exceeded the Zacks Consensus Estimate of $1.1 billion.The backlog at the end of the fiscal first quarter was $5.44 billion, up 15% year over year.Tetra Tech, Inc. Price, Consensus and EPS Surprise Tetra Tech, Inc. price-consensus-eps-surprise-chart | Tetra Tech, Inc. QuoteSegmental RevenuesRevenues from U.S. Federal customers (accounting for 34% of the quarter’s revenues) were up 32% year over year, supported by a solid pipeline of projects from USAID and strength in the federal sector. U.S. Commercial sales (17% of the quarter’s revenues) increased 7% year over year, driven by higher environmental services sales.U.S. State and Local sales (14% of the quarter’s revenues) increased 47% year over year, driven by strength in advanced water treatment and disaster response. International sales (35% of the quarter’s revenues) were up 4% year over year, backed by strength in the U.K. water consulting sector.Tetra Tech reports revenues under the segments discussed below:Net sales of the Government Services Group segment were $601.2 million, up 36% year over year. Revenues from the Commercial/International Services Group segment totaled $596.2 million, representing a year-over-year increase of 4%.TTEK's Margin ProfileIn the fiscal first quarter, Tetra Tech’s subcontractor costs totaled $223.3 million, reflecting an increase of 4.8% from the year-ago quarter. Other costs of revenues (adjusted) were $975.9 million, up 18.3% from the first quarter of fiscal 2024. Selling, general and administrative expenses (adjusted) were $84 million, up 5.7% from the year-ago fiscal quarter.Adjusted operating income increased 23.9% year over year to $137.5 million while the adjusted margin increased 60 basis points to 11.5%.Tetra Tech’s Balance Sheet and Cash FlowWhile exiting the fiscal first quarter, Tetra Tech had cash and cash equivalents of $248.1 million compared with $232.7 million recorded at the end of the fourth quarter of fiscal 2024. Long-term debt was $888.4 million compared with $812.6 million recorded at the end of fourth-quarter fiscal 2024.In the first three months of fiscal 2025, Tetra Tech generated net cash of $13.1 million from operating activities compared with $9.2 million in the prior fiscal year period. Capital expenditure was $3.4 million, relatively stable year over year. In fiscal 2024, TTEK’s proceeds from borrowings amounted to $90 million while repayments on long-term debt totaled $15 million.Shareholder-Friendly PoliciesTetra Tech distributed dividends totaling $15.5 million in the first three months of fiscal 2025. This compares favorably with dividends of $13.9 million distributed in the previous fiscal year period. It repurchased shares worth $25 million in the same period.TTEK’s Fiscal 2025 OutlookFor fiscal 2025 (ending September 2025), Tetra Tech anticipates net revenues to be in the range of $4.365-$4.765 billion compared with $4.565-$4.765 billion expected earlier. The projection is favorably comparable to net revenues of $4.322 billion reported in fiscal 2024. Adjusted earnings are predicted to be $1.37-$1.52 per share compared with $1.40-$1.50 expected earlier. It reported earnings of $1.26 per share in fiscal 2024.For the fiscal second quarter (ending March 2025), management estimates net revenues to be in the range of $1.0-$1.1 billion. Adjusted earnings are projected to be in the band of 30-33 cents per share.Zacks Rank & Stocks to ConsiderTTEK currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the same space:Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 (ending March 2025) earnings has remained stable.Resideo Technologies REZI presently carries a Zacks Rank #2 (Buy). REZI delivered a trailing four-quarter average earnings surprise of 27.3%.In the past 60 days, the consensus estimate for Resideo Technologies’ 2024 earnings has been stable.Enersys ENS currently carries a Zacks Rank of 2. ENS delivered a trailing four-quarter average earnings surprise of 1.6%.In the past 60 days, the consensus estimate for Enersys’ fiscal 2025 (ending March 2025) earnings has increased 10.2%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tetra Tech, Inc. (TTEK): Free Stock Analysis Report Graham Corporation (GHM): Free Stock Analysis Report Enersys (ENS): Free Stock Analysis Report Resideo Technologies, Inc. (REZI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks