Tutor Perini Corp. reports that its 2022 fourth-quarter revenue dropped 18% compared to 2021. The Los Angeles-based construction company’s revenue for 2022 was $3.8 billion, compared to $4.6 billion in 2021.
Tutor officials state the lower revenue resulted from fewer major projects over the past three years, adding that COVID-19, political and economic factors also played a role in the drop. These factors resulted in Tutor not being “awarded certain civil segment projects totaling more than $10 billion despite having been the low or preferred bidder,” officials say.
Construction losses in 2022 totaled $204.8 million compared to income from construction operations of $226.8 million for 2021. The decrease was the result of project adjustments related to adverse legal judgments, settlements and estimate changes.
Ronald Tutor, chairperson and CEO, says despite the decreased revenue and earnings in 2022, the company expects growth and profitability in 2023, as well as “continued strong operating cash and robust new award bookings that should position us favorably for a return to greater profitability over the next several years.”
Tutor officials indicate the company has adjusted business strategies for its specialty contractor segment in New York. The company ramped up settlement negotiations of “certain specialty contractors segment disputes in New York to accelerate the collection of cash and reduce the risk and uncertainty associated with continued lengthy and costly litigation, arbitration proceedings and settlement negotiations.”
With the new approach, Tutor will make concessions for a number of disputes to facilitate settlements.
“This shift in collections strategy contributed to the significant decline in income from construction operations in 2022, and most of the resulting cash is expected to be collected in 2023,” officials claim.
Tutor’s business strategy also includes leadership changes throughout the specialty contractor sector. The company replaced key leadership team members at WDF Inc. with experienced company veterans. Furthermore, it appointed a senior executive with previous experience in dealing with New York public agencies and customers to a new role overseeing the specialty contractor and building sectors.
Officials add Tutor has become more selective in the types of projects that it will pursue and execute in New York, particularly in its specialty contractor operations. Tutor has also “successfully negotiated improved project contractual terms, which it believes will contribute to a more equitable allocation of risk by making certain delays and events compensable, as well as promoting better-working capital efficiency.”