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Dive brief:
- Tutor Perini on Monday withdrew its 2024 earnings guidance and told investors that expects a loss for the third quarter due to dispute resolution.
- In total, the company expects approximately $145 million in charges for the quarter due to “an unexpected adverse arbitration decision” for a bridge project in California and the net result of six other major disputes, which did not he specified in his statement.
- Despite this news, Tutor Perini said it had significant award activity during the quarter and expects a delivery backlog of approximately $14 billion, up 32% from the same period last year. It also said it would use positive cash settlements from other disputes to pay down $100 million to $150 million in debt by the end of the year and expects to return to profitability by 2025.
Diving knowledge:
Disputes over multi-year megaprojects have hung on the results of the large civil contractor for several quarters. President of the firm and outgoing CEO Ron Tutor has asked for patience of the investors.
Still, these problems have persisted, illustrating this risk involved in multi-million dollar projects where deadlines can be extended and projecting costs years down the road can be an inexact science.
“We hope to reverse the negative impact of these decisions in the future,” Tutor said in a press release. “With many of our biggest disputes now behind us, we expect to experience less earnings volatility in 2025 and beyond.”
The contractor has not yet announced when it will report third-quarter earnings.
