Tutor Perini released their earnings today. As previously announced in January, they were much, much lower than previously forecast.
Why should people interested in California High Speed Rail care?
Tutor Perini won the contract for the first 29 miles of civil construction for the California High Speed Rail Authority. They almost didn’t win the contract. Based on the bidding rule’s emphasis on “quality”, Tutor Perini would have been out of the running. CHSRA CEO Jeff Morales quietly changed the rules midway through the procurement process and Tutor Perini’s low bid was accepted. In addition, Tutor Perini could have been disqualified because of issues with its financial capacity, but again the Authority gave Tutor Perini a pass.
At the time, CARRD raised issues about both the bidding process change and Tutor Perini’s financials. Tutor Perini had been declaring accounting profits but showing cash losses for years – and the debt to finance the cash losses was piling up. Tutor Perini CEO Ron Tutor denied that his company had cashflow losses – in contradiction to the published financials.
Since then, Tutor Perini has continued to rack up cashflow losses, despite large inflows from decades old litigation (Big Dig and MGM City Center). Financial disclosure statements provide no real explanation of the discrepancies. Hopefully this years annual SEC filing will show why Tutor Perini’s receivables continue to climb, relative to revenues and liabilities.
If not, it is past time for the SEC, investors and customers to start asking questions.