Zacks Investment Research downgraded
Dycom Industries Inc
) to a Zacks Rank #5 (Strong Sell) on Mar 1, 2014.
Why the Downgrade?
Dycom witnessed downward estimate revisions after reporting
disappointing second-quarter 2014 results. Out of the 7 analysts
covering the stock, 1 and 3 have lowered their estimates for the
current and the next quarter respectively in the last 7 days,
while 2 and 4 analysts have lowered their estimates for fiscal
2014 and fiscal 2015, respectively.
Moreover, in the last 30 days all 7 estimates were revised
downward for the current quarter, next quarter and fiscal 2014.
This sharp decline in estimates was seen after the company
announced its preliminary guidance, whereby it mentioned that the
bad weather is expected to affect its third quarter, in addition
to the second quarter.
Therefore, the company trimmed its outlook for the same. It
now expects total revenue for the third quarter of fiscal 2014 to
be flat year over year. Earlier, Dycom expected revenues for the
third quarter to be in the mid-single-digit range.
On Feb 26, Dycom Industries reported second-quarter (ended Jan
26) fiscal 2014 net loss of $3.1 million or 9 cents per share, in
line with the Zacks Consensus Estimate. In the prior-year
quarter, the company had reported net income of $5.2 million or
15 cents per share.
Dycom's performance has been impacted by severe weather
conditions in the latter half of second-quarter 2014. Heavy
snowfall and the exceptionally cold temperature resulted in lower
number of available workdays, which weighed on both productivity
However, the company's revenues picked up 5.7% year over year
to $390.5 million and there was organic growth of 0.9%. However,
revenues fell short of the Zacks Consensus Estimate of $395
million. Despite the headwinds, Dycom's revenues benefited mainly
from its strong portfolio of customers, primarily in the telecom
and wireless equipment industries.
The Zacks Consensus Estimate for the current quarter and the
next quarter of fiscal 2014 remained stagnant at 22 cents and 50
cents respectively, in the last 7 days. For 2015, the Zacks
Consensus Estimate plummeted 3.8% to $1.78 per share.
However, in the last 30 days, the Zacks consensus Estimates
sank as much as 31.3%, 5.7% and 19.7% respectively for the
current quarter, next quarter and fiscal 2014. For fiscal 2015,
the Zacks Consensus Estimate contracted 5.3% to $1.78 a
Not all specialty contracting service providers are performing
as poorly as Dycom. Some better-ranked companies in the industry
that sport a Zacks Rank #2 (Buy) include
Quanta Services Inc
AECOM Technology Corp
Altra Holding Inc.
AECOM TECH CORP (ACM): Free Stock Analysis
ALTRA HOLDINGS (AIMC): Free Stock Analysis
DYCOM INDS (DY): Free Stock Analysis Report
QUANTA SERVICES (PWR): Free Stock Analysis
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