Tutor Perini takes ‘unexpected’ $102m hit over California bridge dispute

Image: Tutor Perini

The company said the adverse arbitration decision this month (October) related to a civil segment bridge project in California, although it did not reveal exactly what the project was.

Tutor Perini said in a statement to investors that it “strongly disagrees with the decision and intends to appeal”.

It added, “While the arbitration panel agreed with prior non-binding rulings of an independent dispute resolution board comprised of industry experts, the most important of which was that the company was not provided accurate construction documents for the project, including geotechnical information, the arbitration panel failed to award the company its complete damages and applies offsets that the company strongly disputes.”

The arbitration decision was one of several disputed matters to have been resolved this quarter, the company said.

It said it expected to record a net pre-tax loss from construction operations of $43 million related to another six large disputed balances, with an associated expected net cash inflow to the company resulting from these resolutions of around $180 million.

It also received a favourable ruling from an independent dispute board that issues a non-binding decision as to how much damages the company is entitled to recover associated with a mass-transportation project in the Northeast.

But the charges against it mean the company expects to see a loss from construction operations in the third quarter and negative earnings per share. As a result, it has withdrawn its earnings per share (EPS) guidance for 2024.

Separately, the company highlighted its record order backlog of $14 billion as of 30 September 2024, up 35% compared to 30 June 2024.

With decisions on pending on several other large projects, it said the order backlog could see further significant growth for the fourth quarter.

Ronald Tutor, chairman and chief executive officer of Tutor Perini, said, “Unfortunately, we received a couple of unexpected and rather inexplicable legal decisions that will negatively impact earnings for the third quarter of 2024. We strongly disagree with both rulings and are appealing them.

“We hope to reverse the negative impact of these decisions in the future. With many of our larger disputes now behind us, we anticipate that we will experience less earnings volatility in 2025 and beyond. Finally, we are enjoying a remarkably successful year in terms of major new awards that are driving our backlog to new record levels, setting a solid foundation for revenue growth and strong profitability and cash flow in the years ahead. Our backlog could continue to grow substantially in the near term due to certain bids outstanding and other projects that will be bidding soon.”