Tutor Perini, the major infrastructure contractor, is maintaining a confident outlook despite concerns surrounding the Trump administration's tariffs and potential federal spending cuts. In his first earnings call since becoming CEO, Gary Smalley expressed optimism for the company’s recovery, focusing on returning to profitability in 2025 after a challenging year.

Despite recent concerns regarding tariffs and scrutiny over federal funding, Smalley reassured investors and analysts during a February 27 earnings call, stating that the company does not anticipate any significant impact from these economic changes. “We do not, repeat, do not, anticipate any significant impacts to our business related to these factors,” Smalley said, emphasizing that Tutor Perini does not foresee major projects being canceled, delayed, or defunded due to tariff-related issues.

Smalley explained that the company’s procurement strategy helps mitigate risks associated with price increases, noting, “Many of our contracts have Buy American provisions to promote the use of domestic products, and many have allowances or escalation clauses that can protect us from certain unforeseen cost increases, including those associated with new tariffs.”

‍New CEO's Focus on Profitability and Legacy Disputes

Smalley’s primary goal as CEO is to return Tutor Perini to profitability and resolve the company's ongoing legacy legal disputes, which have weighed on its bottom line in recent years. “We expect to continue making substantial progress this year and next year in resolving and collecting on the remainder of our legacy disputes, about a dozen or so that are significant,” Smalley said.

Although Smalley now leads the company, Ron Tutor, the firm’s former CEO, will continue to provide guidance as executive chairman. He is focused on advising the leadership team, especially when it comes to resolving legal disputes and reviewing major projects that the company is set to pursue. “Ron is currently helping drive the setup of the major projects that we have already been awarded over the last several months,” Smalley added, emphasizing the importance of proper project setup to ensure the successful execution of the company’s larger projects.

Financial Performance and Backlog Growth

In terms of financials, Tutor Perini reported a loss of $79.4 million in the fourth quarter, a steeper loss than the $47.5 million reported in the same period in 2023. For the full year, the company experienced a loss of $163.7 million, slightly less than the $171.2 million loss recorded in 2023. These losses were attributed to unfavorable adjustments related to project changes, judgments, settlements, and unapproved change orders, according to Ryan Soroka, the company’s CFO.

Despite these losses, Tutor Perini posted a 4.5% increase in revenue for Q4 2024, reporting $1.07 billion compared to $1.02 billion in Q4 2023. Revenue for the full year reached $4.33 billion, up 11.5% from the previous year. This increase was driven by increased project execution activities in both building and civil segments.

The company's backlog grew significantly, reaching $18.7 billion by the end of 2024, an increase of 84% compared to the previous year. Smalley attributed this growth to $12.8 billion in new awards and contract adjustments. The healthy backlog provides Tutor Perini with more favorable terms when negotiating new contracts. “With $18.7 billion in backlog, we certainly can be more selective than we have been in the past,” Smalley explained.

Large-Scale Projects and Future Prospects

Tutor Perini has secured several high-profile projects, including a $3.76 billion Manhattan jail project, a $1.66 billion City Center Guideway in Honolulu, and a $1.4 billion healthcare campus project in California. The company also secured contracts for the $1.18 billion Newark AirTrain replacement and a $1.1 billion tunnel project in New York. These large-scale projects are a key part of Tutor Perini’s strategy moving forward and will help boost its profitability.

The company is also keeping an eye on potential international projects, particularly rebuilding efforts in Ukraine. Ron Tutor suggested that if the U.S. government participates in Ukraine’s post-war reconstruction, Tutor Perini’s experience with projects in Iraq and Afghanistan positions it well for this opportunity. “If the U.S. government participates in the rebuilding of Ukraine after the war is over, we believe our PMSI group is extremely well positioned to participate in that effort,” Tutor said.

Community Support Amidst Challenges

Smalley also addressed the impact of wildfires in Los Angeles on the company, noting that while Tutor Perini’s headquarters was not affected, several employees lost their homes. “While our operations were not impacted, a few of our employees unfortunately lost their homes to the fires and are now dealing with the challenges of relocating and rebuilding,” Smalley said. He assured that Tutor Perini is committed to assisting affected employees and will contribute to local recovery efforts, including participating in debris removal activities.

Conclusion: Tutor Perini’s Resilience and Future Outlook

Tutor Perini remains optimistic despite challenges like legal disputes, tariffs, and losses in certain project areas. The company is focusing on returning to profitability, leveraging its large project backlog and negotiating favorable terms for new contracts. Under Gary Smalley’s leadership, Tutor Perini is positioning itself for a strong recovery, with hopes for profitability in 2025. Additionally, with large projects on the horizon and international expansion possibilities, the future looks bright for the firm, even as it navigates a challenging economic landscape.

In summary, while the company’s financial struggles persist, Tutor Perini's strategic focus on large-scale projects, strong backlog, and market adaptability suggest it will continue to be a key player in the infrastructure industry moving forward. The leadership transition, combined with Ron Tutor's continued guidance, is expected to help the firm overcome its past challenges and solidify its position in the competitive construction landscape.

Originally reported by Julie Strupp in Construction Dive.