Tetra Tech Surpasses Q1 Earnings & Revenues Estimates, Raises 26' View

Tetra Tech, Inc. TTEK reported first-quarter fiscal 2026 (ended December 2025) adjusted earnings of 35 cents per share, which surpassed the Zacks Consensus Estimate of 31 cents. The company’s adjusted earnings per share outperformed the management’s guided range of 30-33 cents. The bottom line came in line with the year-ago quarter reported figure.TTEK’s Revenue & Segmental PerformanceTetra Tech generated revenues of $1.21 billion, reflecting a year-over-year decrease of 14.8%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.04 billion, down 13.4% year over year. However, the quarterly top line surpassed the management’s guided range of $950 million-$1.0 billion.Tetra Tech’s adjusted net revenues also exceeded the Zacks Consensus Estimate of $973 million.The backlog at the end of the fiscal first quarter was $3.95 billion, down 27.3% 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 18% of the quarter’s revenues) were up 7% year over year, supported by a solid pipeline of projects from the Defense and U.S. Army Corps of Engineers. U.S. Commercial sales (20% of the quarter’s revenues) decreased 3% year over year due to lower renewable energy sales.U.S. State and Local sales (14% of the quarter’s revenues) increased 10% year over year, driven by strength in municipal water infrastructure and digital water automation. International sales (48% of the quarter’s revenues) were up 13% year over year, driven by strength in UK’s water and digital water automation programs.Tetra Tech reports revenues under the segments discussed below:Net revenues of the Government Services Group segment were $432.1 million, down 33.2% year over year. Net revenues from the Commercial/International Services Group segment totaled $605.1 million, representing a year-over-year increase of 10%.TTEK's Margin ProfileIn the fiscal first quarter, Tetra Tech’s subcontractor costs totaled $173.5 million, reflecting a decrease of 22.3% from the year-ago quarter. Other costs of revenues (adjusted) were $816.8 million, down 16.3% from the first quarter of fiscal 2025. Selling, general and administrative expenses (adjusted) were $86.8 million, up 3% from the year-ago fiscal quarter.Adjusted operating income decreased 2.7% year over year to $133.5 million while the adjusted margin increased 140 basis points to 12.9%.Tetra Tech’s Balance Sheet and Cash FlowWhile exiting the fiscal first quarter, Tetra Tech had cash and cash equivalents of $269.4 million compared with $167.5 million recorded at the end of fiscal 2025. Long-term debt was $834.3 million compared with $763.4 million recorded at the end of fiscal 2025.In the first three months of fiscal 2026, Tetra Tech generated net cash of $72.3 million from operating activities compared with $13.1 million in the prior fiscal year period. Capital expenditure was $4.2 million, up 20.9% year over year. In the first three months of fiscal 2026, TTEK’s proceeds from borrowings amounted to $70 million while there were no repayments on long-term debt.Shareholder-Friendly PoliciesTetra Tech distributed dividends totaling $16.9 million in the first three months of fiscal 2026. This compares favorably with dividends of $15.5 million distributed in the previous fiscal year period. It repurchased shares worth $50 million in the same period, higher than $25 million in the previous fiscal year period.TTEK’s Fiscal 2026 OutlookFor fiscal 2026 (ending September 2026), Tetra Tech anticipates net revenues to be in the range of $4.15-$4.30 billion, higher than $4.05-$4.25 billion projected earlier. However, the projection is lower than the net revenues of $4.62 billion reported in fiscal 2025. Adjusted earnings are currently predicted to be $1.46-$1.56 per share compared with $1.40-$1.55 guided previously. It reported earnings of $1.56 per share in fiscal 2025.For the fiscal second quarter, management estimates net revenues to be in the range of $975 million-$1.025 billion. Adjusted earnings are projected to be in the band of 30-33 cents per share.TTEK’s Zacks RankThe company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Some better-ranked stocks from the same space are discussed below:Nordson Corporation NDSN currently carries a Zacks Rank of 2 (Buy). Nordson’s earnings topped the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 2.2%. In the past 60 days, the Zacks Consensus Estimate for Nordson’s fiscal 2026 earnings has increased 2.3%.Quanta Services, Inc. PWR currently carries a Zacks Rank of 2. Quanta Services’ earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 5.8%. In the past 60 days, the Zacks Consensus Estimate for Quanta Services’ fiscal 2026 earnings has increased 0.6%.Flowserve Corporation FLS presently carries a Zacks Rank of 2. Flowserve’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 10.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2026 earnings has increased a penny.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.SeeWant 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 Quanta Services, Inc. (PWR): Free Stock Analysis Report Tetra Tech, Inc. (TTEK): Free Stock Analysis Report Flowserve Corporation (FLS): Free Stock Analysis Report Nordson Corporation (NDSN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks