Tetra Tech To Do Environmental Remediation Work For US Navy

Tetra Tech, Inc. (NASDAQ:TTEK) has been providing support to the U.S. Navy, particularly NAVFAC Southwest, for environmental remediation work. Tetra Tech EC was one of the six who won a U.S. Navy multiple-award contract for environmental remediation of radiological contaminants (RADMAC II).

The contract, which is worth $240 million, calls for work to be performed at several Navy and Marine Corps installations in California, Arizona, Nevada, Colorado, New Mexico, Utah, and other locations across the U.S.

RADMAC II, which will focus on restoration projects at radiologically contaminated sites, supports the NAVFAC Southwest and NAVFAC Atlantic areas of responsibility. RADMAC II is a follow-on contract to RADMAC I, wherein Tetra Tech EC also provided technical services for the Navy’s remediation programs in California and Washington.

Tetra Tech EC will help restore the sites for safe use by performing tasks including radiological investigations, surveys and sampling analysis, pilot and treatability studies, remediation, operations and maintenance, and other associated actions.

Tetra Tech has performed nearly $2 billion in services for the Navy and currently holds several such contracts with NAVFAC. Further, the company won several government contracts in the past few years, which have significantly supplemented its top line.

However, Tetra Tech’s revenues and profitability have been periodically affected by concerns including decreased consumer confidence, lingering effects of international conflicts, energy costs and inflation.

In addition, demand for Tetra Tech’s services is cyclical, and vulnerable to economic downturns, and reductions in government and private industry spending. In addition, the company’s performance remains dependent on crucial factors like economic growth, government fiscal conditions and client spending, which can harm its operations if they take a turn for the worse.

Tetra Tech’s share performance reflected these risks in recent times. Year to date, the company’s shares declined 4.2%, underperforming the Zacks categorized Pollution Control industry’s average decline of 3%. We currently have a Zacks Rank #4 (Sell) on the stock.

Stocks to Consider

Better-ranked stocks in the broader sector include Energy Recovery, Inc. (NASDAQ:ERII) , Altra Industrial Motion Corp. (NASDAQ:AIMC) and Parker-Hannifin Corporation (NYSE:PH) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Energy Recovery has a solid earnings surprise history for the trailing four quarters, having beaten estimates thrice, for an average beat of 70.8%.

Altra Industrial has a positive earnings surprise history, with an average of 12.5% for the trailing four quarters, beating estimates all through.

Parker-Hannifin managed to beat estimates each time over the past four quarters, for a positive earnings surprise of 12.4%.

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