Quanta Services Inc.
) reached a 52-week high of $35.55 on Monday, Mar 3, 2014.
However, the stock closed at $35.37, representing a one-year
return of about 24.6% and a decent year-to-date return of about
13.04%. Average volume of shares traded over the last three
months is approximately 1,645,770.
Increase in demand for the company's Electric Power services,
increased revenues in the company's Natural Gas and Pipeline
Infrastructure Services segment driven by shale gas and
reasonably strong fourth-quarter results are some of the growth
catalysts for the company.
Quanta Services delivered positive earnings surprises in the
last four quarters with an average beat of +12.9%. This Zacks
Rank #2 (Buy) company has a market cap of $7.69 billion and
long-term expected earnings growth rate of 8.00%.
Quanta Services is benefiting from increased spending in the
Electric Power segment on projects to upgrade and deploy its
electric power transmission infrastructure to improve system
reliability and deliver renewable electricity from new generation
sources to demand centers. Favorable industry legislation is also
generating incentives and a positive environment for utilities to
invest in their electrical infrastructure, particularly
Quanta Services is one of the largest full-service providers
of natural gas and oil pipeline infrastructure services in North
America and is well placed to seize opportunities, driven by the
development and production of resources from unconventional shale
developments and Canadian oil sands.
Development activity for gathering system infrastructure in
liquid-rich shale is strong and there are indications that demand
for its transmission pipeline services could increase
significantly in 2013 and 2014. Attractive growth potential is
driven by rehabilitation and replacement services from pipeline
integrity initiatives and pursuance of midstream gathering system
opportunities in liquid-rich unconventional shale.
Modest 4Q13 Earnings
Quanta Services reported fourth-quarter 2013 non-GAAP earnings
(excluding the one-time items) of 50 cents a share, beating the
Zacks Consensus Estimate by 22%. However, quarterly earnings were
down 2% from the prior-year quarter. Profits were primarily
driven by increasing demand for the company's services.
Revenues for the quarter increased a robust 106.8% year over
year to $3.0 billion, driven by healthy revenue growth across all
the three legacy business units of the company due to the rising
demand for energy infrastructure, especially in the LNG, gas
processing and oil and gas markets across the world.
Over the last 7 days, 1 and 2 of the 11 estimates have been
revised upward for the current and next quarter, respectively.
Similarly, for 2014 and 2015, 1 of 10 and 2 of 9 estimates have
been revised upward. Thus, the Zacks Consensus Estimate for the
current and next quarter grew 2.7% to 38 cents and 2.3% to 45
For fiscal 2014 estimates increased 1.1% to $1.85, while for
2015 estimates were up 1.9% to $2.15 a share.
Quanta is benefiting from the rising demand for power and
energy infrastructure worldwide. Projects from around the world
have been a major benefactor for the company. The company is
positive about winning higher number of orders in its Oil &
Gas division, primarily for its mainline pipe construction
Other Stocks to Consider
Investors interested in the heavy industries sector can
AECOM Technology Corp.
Altra Holdings Inc.
), all of which carry a Zacks Rank #2 (Buy).
AECOM TECH CORP (ACM): Free Stock Analysis
ALTRA HOLDINGS (AIMC): Free Stock Analysis
ENERSYS INC (ENS): Free Stock Analysis Report
QUANTA SERVICES (PWR): Free Stock Analysis
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