Quanta Services Inc.
(PWR) reported third-quarter 2013 non-GAAP earnings (excluding
the one-time items) of 46 cents a share, beating the Zacks
Consensus Estimate by 15% and improving 9.5% from the prior-year
quarter. Profits were primarily driven by increasing demand for
the company's services.
GAAP earnings per share were 43 cents, up 10.3% year on
Total revenue for the quarter was $1.65 billion, up 7.8% from
$1.53 billion in the prior-year quarter, aided by increased
revenues from the company's Electric Power Infrastructure
Services segment. Quanta reported revenue growth only in one of
its three operating segments.
revenues in the quarter were $1.05 billion, down 3.7% from $1.09
billion in the prior-year period. The Electric Power segment
continued to experience increased demand for electric
transmission and distribution services, as the electric power
industry is investing at record levels to upgrade and modernize
North America's power grid. In addition, regulations to improve
Red reliability, renewable interconnections, and the impact of
switching to gas generation are expected to continue to drive the
power industry's investments and electric infrastructure over the
However, all this was offset by a $57-million decrease
quarter-over-quarter in emergency restoration services, with
approximately $18.6 million occurring in the third quarter of
2013 compared with $75.1 million in the third quarter of 2012.
Additionally, revenues during the quarter were negatively
impacted by a decline in activity related to renewable energy
projects, as the prior year's third quarter had substantial
contributions from a large-scale solar project. The segment had a
backlog of $2.9 billion compared with $5.3 billion in the
Natural Gas and Pipeline
revenues came in at $552.3 million, reflecting a 40.1%
year-over-year increase. This growth was driven by increased
revenues from projects related to unconventional shale
developments in certain regions of North America. Revenues for
the third quarter of 2013 were also favorably impacted by the
contribution of approximately $56 million in revenues from the
acquisition of Nacap in late Jul 2013. The segment had a backlog
of $1.30 billion compared with $2.2 billion in the prior-year
Fiber Optic Licensing
revenues declined 9.8% to $44.3 million from $49.2 million in the
comparable quarter last year. The decline in revenues was
primarily attributable to decline in telecom service revenues.
The segment had a backlog of $141 million compared with $545
million in the prior-year quarter.
Income and Expenses
Operating income in the quarter was $141.1 million compared
with $127.1 million in the prior-year quarter, reflecting an
increase of 11%. SG&A expense was $125 million compared with
$115 million in the comparable quarter last year.
Cash Flow and Balance Sheet
Cash and cash equivalents at the end of the quarter were
$309.1 million and shareholders' equity was $4.0 billion.
Operating cash flow from continuing operations was about $83
million for the third quarter of 2013 compared with $47 million
for the third quarter of 2012. Capital expenditures were about
$47 million, while free cash flow for the third quarter was
approximately $37 million. This compares with $112 million in
negative free cash flow for the third quarter of 2012.
On Oct 30, Quanta Services increased its credit limit to $1.3
billion from $700 million, with an amendment to its senior
secured revolving credit facility. The increase in its credit
capability was primarily to lower its costs and expand its
Quanta is positive about its performance going forward. Quanta
expect revenues for the fourth quarter of 2013 to be in the range
of $1.65 billion - $1.75 billion. Non-GAAP earnings for the
quarter are projected in the range of 42 cents - 44 cents.
Quanta currently has a Zacks Rank #3 (Hold). However some
other players operating in the same industry and worth
Jacobs Engineering Group Inc.
, Tyco International Ltd.
Hutchison Whampoa Limited
(HUWHY). All three carry a Zacks Rank #2 (Buy).
HUTCHINSON WHAM (HUWHY): Get Free Report
JACOBS ENGIN GR (JEC): Free Stock Analysis
QUANTA SERVICES (PWR): Free Stock Analysis
TYCO INTL LTD (TYC): Free Stock Analysis
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