Kadant Keeps Quarterly Dividend at $0.32 a Share, Payable Feb. 6 to Shareholders of Record Jan. 9

Tetra Tech, Inc. TTEK reported fourth-quarter fiscal 2024 (ended Sept. 30, 2024) adjusted earnings of 38 cents per share, which surpassed the Zacks Consensus Estimate of 37 cents. The bottom line surged 15% 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 Performance

Tetra Tech generated revenues of $1.37 billion, reflecting a year-over-year increase of 9%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.14 billion, up 8% year over year. The quarterly top line met the upper end of the management’s guided range of $1.09-$1.14 billion.

Tetra Tech’s adjusted revenues also exceeded the Zacks Consensus Estimate of $1.13 billion.

The backlog at the end of the fiscal fourth quarter was $5.38 billion, up 12% year over year.

Tetra Tech, Inc. Price, Consensus and EPS Surprise

Tetra Tech, Inc. price-consensus-eps-surprise-chart | Tetra Tech, Inc. Quote

Revenues from U.S. Federal customers (accounting for 33% of the quarter’s revenues) were up 12% year over year, supported by strength across civilian and coastal marine navigation sectors. U.S. Commercial sales (18% of the quarter’s revenues) increased 3% year over year, driven by higher renewable energy and environmental remediation sales.

U.S. State and Local sales (12% of the quarter’s revenues) increased 9% year over year, driven by strength in advanced water treatment. International sales (37% of the quarter’s revenues) were up 6% year over year, backed by strength in the infrastructure sector.

Tetra Tech reports revenues under the segments discussed below:

Net sales of the Government Services Group segment were $513 million, up 12% year over year. Revenues from the Commercial/International Services Group segment totaled $632 million, representing a year-over-year increase of 5%.

TTEK's Margin Profile

In the fiscal fourth quarter, Tetra Tech’s subcontractor costs totaled $230 million, reflecting an increase of 13.2% from the year-ago quarter. Other costs of revenues (adjusted) were $899.2 million, up 6.4% from the fiscal fourth quarter of 2023. Selling, general and administrative expenses (adjusted) were $92.7 million, up 20% from the year-ago fiscal quarter.

Operating income increased 33.4% year over year to $143.3 million, while the adjusted margin increased 50 basis points to 13.3%.

Tetra Tech’s Balance Sheet and Cash Flow

While exiting the fiscal fourth quarter, Tetra Tech had cash and cash equivalents of $232.7 million compared with $168.8 million recorded at the end of the fourth quarter of fiscal 2023. Long-term debt was $812.6 million compared with $879.5 million recorded at the end of fourth-quarter fiscal 2023.

In fiscal 2024, Tetra Tech generated net cash of $358.7 million from operating activities compared with $368.5 million in the prior fiscal year. Capital expenditure was $18.1 million, down 32.7% year over year. In fiscal 2024, TTEK’s proceeds from borrowings amounted to $217 million, while repayments on long-term debt totaled $287 million.

Shareholder-Friendly Policies

Tetra Tech distributed dividends totaling $58.8 million in fiscal 2024. This compares favorably with dividends of $52.1 million distributed in the previous fiscal year. It repurchased shares worth $12.9 million in the same period.

TTEK’s Fiscal 2025 Outlook

For fiscal 2025 (ending September 2025), Tetra Tech anticipates net revenues to be in the range of $4.565-$4.765 billion, higher than $4.322 billion reported in fiscal 2024. Adjusted earnings are predicted to be $1.40-$1.50 per share compared with $1.26 reported in fiscal 2024.

For the fiscal first quarter (ending December 2024), management estimates net revenues to be in the range of $1.09-$1.15 billion. Adjusted earnings are projected to be in the band of 32-34 cents per share.

Zacks Rank & Stocks to Consider

TTEK currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the same space:

Kadant Inc. KAI presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It has a trailing four-quarter average earnings surprise of 17.2%. The Zacks Consensus Estimate for KAI’s 2024 earnings has improved 1.8% in the past 60 days.

Atmus Filtration Technologies Inc. ATMU presently has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 13.8%, on average. The consensus estimate for ATMU’s 2024 earnings has increased 1.3% in the past 60 days.

Generac Holdings GNRC presently carries a Zacks Rank of 2. GNRC delivered a trailing four-quarter earnings surprise of 10.8%, on average. The Zacks Consensus Estimate for Generac Holdings’ 2024 earnings has increased 5.1% in the past 60 days.

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Graco Inc.’s GGG financial stability is challenged by weakness in the Industrial and Process segments. Elevated costs are putting a strain on the bottom line.

Headquartered in Minneapolis, MN, Graco engages in designing, manufacturing and marketing equipment and systems used to measure, move, control, spray and dispense fluid as well as powder materials. The company offers equipment solutions for tough-to-handle materials with high viscosities, abrasive or corrosive properties and multiple component materials that demand precise ratio control.

GGG currently carries a Zacks Rank #4 (Sell). In the past year, the stock has gained 11.2% compared with the industry’s 32.8% growth.

Business Weakness: Graco is experiencing softness in the Industrial segment, due to decline in finishing system sales in the Asia-Pacific region. A decrease in demand for the company’s semiconductor, industrial lubrication and process transfer equipment products owing to a weakness in the industrial sector is hampering the Process segment’s performance. The company expects organic net sales to decline in low single-digit on a constant-currency basis for 2024.

High Costs: Rising costs pose a threat to the company’s bottom line. In 2023, Graco’s selling, marketing and distribution costs increased 3.9% from the year-ago period. General and administrative expenses jumped 11.5% in the same period. Operating expenses increased 6% in 2023 due to incremental share-based compensation and increased spending on product development. The trend continued in the first nine months of 2024, with selling, marketing and distribution costs, and general and administrative expenses increasing 3.4% and 6.3%, respectively, year over year. The metrics, as a percentage of net sales, increased 90 basis points each, year over year.

Forex Woes: Graco has operations in multiple nations. International expansion exposes it to risks arising from unfavorable movement in foreign currencies, geopolitical issues and other headwinds. In the first nine months of 2024, foreign currency translation had a negative impact of 1% on the Asia Pacific region’s revenues.

Stocks to Consider

Some better-ranked companies are discussed below.

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 earnings has increased 8.4%.

Crane Company CR presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 7.6%.

In the past 60 days, the consensus estimate for CR’s 2024 earnings has increased 1.2%.

Kadant Inc. KAI presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 17.2%.

The Zacks Consensus Estimate for KAI’s 2024 earnings has increased 1.8% in the past 60 days.

Zacks Investment Research

Parker-Hannifin Corporation PH has been benefiting from strength in the Aerospace Systems segment, driven by solid momentum in commercial and military end markets. Segmental organic revenues jumped 17.2% year over year in the first quarter of fiscal 2025 (ended Sept. 30, 2024), supported by strength across both OEM and aftermarket channels.

In the quarters ahead, the segment is expected to benefit from solid demand for its products and aftermarket support services in general aviation and military end markets. The company expects the Aerospace Systems segment’s organic sales to increase 10% from the year-ago level in fiscal 2025 (ending June 2025).

The company intends to strengthen and expand its businesses through acquisitions. Its acquisition of Meggitt expanded its presence in the United Kingdom, thereby positioning it well to provide a broader suite of solutions for aircraft and aero-engine components and systems. Acquisitions boosted the company’s sales by 2.6% in fiscal 2024.

The company’s portfolio reshaping actions also include disposing of non-profitable businesses. In November 2024, it divested its composites and fuel containment business for $560 million and a non-core filtration business within the Diversified Industrial Segment for $66 million. This will enable PH to rebalance its portfolio toward its core Aerospace business.

PH remains committed to rewarding its shareholders through dividend payouts. For instance, in fiscal 2024, it rewarded shareholders with dividends of $782 million, indicating an increase of 11% year over year. Also, it hiked its quarterly dividend rate by 10% in April 2024.

PH’s Price Performance

In the past three months, this Zacks Rank #3 (Hold) company's shares have gained 20.9% compared with the industry’s 13.5% growth.

Despite the positives, the company has been witnessing challenging conditions in off-highway and transportation end markets, which have been hurting its Diversified Industrial segment’s performance. The segment’s organic sales fell 4.5% year over year in the first quarter of fiscal 2025.

Also, a weak liquidity position remains a concern for the company. Exiting the fiscal first quarter, the company had cash and cash equivalents of $371.1 million, much lower than its short-term debt of about $3.5 billion.

Stocks to Consider

Some better-ranked companies from the same space are discussed below:

Kadant Inc. KAI presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It has a trailing four-quarter average earnings surprise of 17.2%. The Zacks Consensus Estimate for KAI’s 2024 earnings has improved 1.8% in the past 60 days.

RBC Bearings Incorporated RBC presently has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 2.5%, on average. The consensus estimate for RBC’s 2024 earnings has increased 2.4% in the past 60 days.

Generac Holdings GNRC presently carries a Zacks Rank of 2. GNRC delivered a trailing four-quarter earnings surprise of 10.8%, on average. The Zacks Consensus Estimate for Generac Holdings’ 2024 earnings has increased 5.1% in the past 60 days.

Zacks Investment Research

Plug Power Inc. PLUG reported third-quarter 2024 results, wherein its bottom and top lines missed the Zacks Consensus Estimate.

Total revenues of $173.7 million missed the consensus estimate of $208 million. The top line declined 12.6% from the year-ago quarter.

The company’s adjusted loss was 25 cents per share, wider than the consensus estimate of a loss of 24 cents per share. The bottom line fared better than the adjusted loss of 47 cents per share reported in the prior-year quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Revenue Details

The company generated revenues of $107.1 million from sales of equipment, related infrastructure and other, reflecting a decrease of 26.2% year over year. Revenues from services performed on fuel cell systems and related infrastructure were $14.1 million, up 51.6% year over year.

Revenues from power purchase agreements were $20.5 million, relatively flat year over year. The company generated revenues of $29.8 million from fuel delivered to customers and related equipment, reflecting an increase of 53.6% year over year. Revenues from other sources decreased 55.1% year over year to $2.2 million.

Plug Power, Inc. Price, Consensus and EPS Surprise

Plug Power, Inc. price-consensus-eps-surprise-chart | Plug Power, Inc. Quote

PLUG’s Costs & Expenses

The company’s total cost of sales in the quarter was $273.8 million, down 18.6% year over year. Selling, general and administrative expenses were $91.6 million, down 13.2% year over year. Interest expense was $9.2 million compared with $11.8 million a year ago.

Net loss in the third quarter was $211.2 million compared with a net loss of $283.5 million in the year-ago quarter.

Balance Sheet/Cash Flow

Plug Power, which currently carries a Zacks Rank #3 (Hold), had cash and cash equivalents of $93.9 million compared with $135 million at the end of December 2023. Long-term debt was $2.3 million compared with $1.2 million at 2023-end.

In the first nine months of 2024, net cash used in operating activities was $597.4 million compared with $863.9 million in the year-ago period. Capital expenditure totaled $253.1 million in the same period compared with $484 million in the year-ago period.

PLUG’s Guidance

For 2024, PLUG expects net sales to be in the range of $700-$800 million. The figure indicates a decrease from $891.3 million reported in 2023.

Stocks to Consider

Some better-ranked companies from the same space are discussed below:

Kadant Inc. KAI presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It has a trailing four-quarter average earnings surprise of 17.2%. The Zacks Consensus Estimate for KAI’s 2024 earnings has improved 1.8% in the past 60 days.

RBC Bearings Incorporated RBC presently has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 2.5%, on average. The consensus estimate for RBC’s 2024 earnings has increased 2.4% in the past 60 days.

Generac Holdings GNRC presently carries a Zacks Rank of 2. GNRC delivered a trailing four-quarter earnings surprise of 10.8%, on average. The Zacks Consensus Estimate for Generac Holdings’ 2024 earnings has increased 5.1% in the past 60 days.

Zacks Investment Research