LOS ANGELES—Tutor Perini Corporation reported results for the third quarter of 2020. Revenue was $1.4 billion, the highest revenue of any quarter in more than 10 years and up 21% compared to $1.2 billion for the third quarter of last year. The company experienced double-digit revenue growth across all segments with only an immaterial impact from the COVID-19 pandemic in the third quarter of 2020. The growth was driven by increased activities on various large infrastructure projects that continue progressing, including the California High-Speed Rail project; the Minneapolis, Minnesota, Southwest Light Rail Transit project; Newark, New Jersey, Airport Terminal One; and the Purple Line projects in Los Angeles, California.
Income from construction operations for the third quarter of 2020 was $83.0 million, the highest third-quarter result since the merger in 2008 and up 73% compared to $47.9 million for the third quarter of last year. Net income attributable to the Company for the third quarter of 2020 was $36.8 million, or $0.72 per diluted share, compared to $19.3 million, or $0.38 per diluted share, for the third quarter of 2019. The significant growth in income from construction operations for the third quarter of 2020 was principally due to contributions from various large infrastructure projects. The strong increase in net income and EPS was also driven by a nominal tax expense in the third quarter of 2020, which primarily resulted from benefits associated with the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Third quarter 2020 backlog remained solid at $9.2 billion compared to $10.0 billion for the second quarter of 2020. Backlog declined sequentially as a result of strong revenue that outpaced new awards in the quarter. New awards totaled $0.6 billion and included $121 million for the company's share of the South Coast Light Rail project in Massachusetts, $75 million of additional funding for various building projects in California, a $54 million mixed-use building project in California and a $47 million military facilities project in Guam. The company has submitted several bids and proposals for new large projects and multiple-award government contracts that are pending customers’ decisions and contract awards expected in the coming months. In addition, the company anticipates bidding on several other significant projects later this year and during the first half of 2021, and expects that backlog will continue to support strong revenue growth.
The company generated $72.7 million of operating cash in the third quarter of 2020. Through the first nine months of 2020, the company generated $131.0 million of operating cash, the highest nine-month result since the merger in 2008 and an increase of 18% compared to $111.4 million generated through the first nine months of 2019. Strong cash contributions driven by increased project execution activities on certain higher-margin projects were enhanced by progress made on the resolution and collection of certain disputed balances. Barring any significant impact on cash flows from the COVID-19 pandemic, the company still anticipates that substantial cash collections associated with large projects and ongoing dispute resolution efforts will contribute to strong operating cash flow throughout the remainder of 2020 and beyond.
Outlook & Guidance
“Our results were outstanding for the third quarter and first nine months of 2020, reflecting double-digit growth that is being driven by large infrastructure projects. Our operating cash flow for the quarter was excellent, as anticipated, and our year-to-date cash flow set a new record since our merger in 2008. Furthermore, our civil and building segments are performing extremely well and delivering solid operating results,” remarked Ronald Tutor, chairman and chief executive officer. Tutor added, “The impacts of the COVID-19 pandemic lessened in the third quarter and are not materially impacting our business at this time, though we will continue to monitor developments and adjust our operations as necessary.”
"As mentioned above, the coronavirus pandemic had an immaterial impact on the company’s results for the third quarter of 2020. Through the first 9 months of 2020, we estimate that the COVID-19 impacts to revenue, income from construction operations and EPS were approximately $230 million, $15 million and $0.21, respectively. The vast majority of the company’s projects, especially in the civil segment, have been designated as essential business, which has allowed the company to continue its work on those projects. However, due to the fluidity of the COVID-19 pandemic, the company is unable at this time to accurately predict the pandemic’s future impact on the company’s business, financial condition or performance. Nonetheless, based on the company’s results to date in 2020 and its current outlook for the remainder of the year, the company is affirming its EPS guidance and still expects EPS to be in the range of $1.80 to $2.10."