Zacks Analyst Blog Highlights: Tetra Tech, Arcadis NV, Shaw Group, URS and Advance Auto Parts

CHICAGO, Nov 12, 2010 (BUSINESS WIRE) -- Analyst Blog features: Tetra Tech Inc. (Nasdaq: TTEK), Arcadis NV (OTC: ARCAY), Shaw Group Inc. (NYSE: SHAW), URS Corp. (NYSE: URS) and Advance Auto Parts Inc. (NYSE: AAP).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: Here are highlights from Thursday's Analyst Blog: Tetra Tech Outperforms Tetra Tech Inc. (Nasdaq: TTEK) recorded another strong quarter performance, reporting earnings per share of 37 cents, above the Zacks Consensus Estimate of 33 cents. The company outperformed its bottom-line expectation of 31 cents to 34 cents for the quarter.

Earnings per share in the quarter were up 12.7% year over year as the company's front-end consulting and engineering services increased its coverage in range of customers.

For full fiscal year 2010, the company reported earnings per share of $1.24, below $1.43 in fiscal 2009, but above the Zacks Consensus Estimate of $1.19.

Revenues Tetra Tech reported gross total revenue of $627.4 million versus $575.1 million in the fourth quarter of fiscal 2009. Total revenue, net of subcontractor costs, was $420.7 million, above $367.0 million in the prior-year quarter and $385 million as per the Zacks Consensus Estimate.

For fiscal 2010, total revenue, net of subcontractor costs, was $1.46 billion, above $1.39 billion in the prior year and $1.42 billion as per the Zacks Consensus Estimate. The company outperformed its expectation of $1.41 billion to $1.43 billion.

Backlog The company's backlog increased to $1.85 billion at the end of fiscal 2010 from $1.58 billion at the end of fiscal 2009 and from $1.68 billion at the end of the third quarter of fiscal 2010.

Income Operating income was $37.1 million compared with $32.7 million in the fourth quarter of 2009. Net income was $23.1 million compared with $20.5 million.

Cash Flow The company generated cash from operations of $42.3 million in the quarter compared with $90.8 million in the same period last year. Cash from operations included a tax refund of $39.8 million in the prior year.

Cash flow from operations in fiscal 2010 was $106.8 million compared with $198.2 million in fiscal 2009.

Outlook The company expects diluted EPS for the first quarter of 2011 to be in the range of 31 cents to 33 cents and total revenue, net of subcontractor costs, to be in the range of $380 million to $410 million.

For fiscal 2011, Tetra Tech expects diluted EPS to be in the range of $1.28 to $1.40 and total revenue, net of subcontractor costs, to be in the range of $1.6 billion to $1.7 billion. The company anticipates an increased backlog in fiscal 2011, driven by acquisition of BPR, a scientific and engineering services firm, and increased demand for Tetra Tech's front-end services, which would offset low back-end services demand.

Tetra Tech continues to focus on the strategic acquisition of the firms to enhance its service offerings and expand its geographic presence. However, an exceedingly slow economic recovery will continue to affect the performance of the company.

Headquartered in Pasadena, California, Tetra Tech Inc. provides environmental engineering and consultancy services to both government and corporate clients.

The company provides about 50% of its management consultancy services to the US Agency for International Development for its various projects worldwide in energy sector. Prime competitors of the company are Arcadis NV (OTC: ARCAY), Shaw Group Inc. (NYSE: SHAW) and URS Corp. (NYSE: URS).

We currently maintain our Neutral rating on Tetra Tech for the long term. For the short term, the company has a Zacks #2 Rank (Buy).

Advance Auto Beats, Opens 43 Stores Advance Auto Parts Inc. (NYSE: AAP) witnessed a rise in profit to $87.6 million or $1.03 per share for the third quarter ended October 9, 2010 from $61.98 million or 65 cents per share in the same quarter of 2009. The profit was higher than the Zacks Consensus Estimate of 92 cents per share.

The increase in profit was attributable to the company's aggressive store expansion strategy, enabling better availability of parts to its customers and leading to higher comparable store sales.

Sales in the quarter rose 11.4% to $1.41 billion, driven by a net addition of 122 stores during the past 12 months. Sales per store increased to $1,667 from $1,587 a year ago. Comparable store sales gain was 9.9%, which was more than double in terms of percentage when compared with 4.7% in the third quarter of 2009.

Gross margin improved 110 basis points to 50.3% from 49.2% in the third quarter of 2009. The improvement was attributable to enhanced merchandising and pricing capabilities, supply chain efficiencies and better availability of parts.

Operating income grew 31.5% to $147.22 million (10.5% of sales) from $104.86 million (8.3% of sales) in the year-ago period. Operating income per store increased to $162 from $144 in the corresponding quarter of 2009.

During the quarter, Advance Auto Parts opened 43 stores, including 10 Autopart International stores. As of October 9, 2010, the company's total store count was 3,540, including 191 Autopart International stores.

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