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Quanta Services (PWR)
Q4 2010 Earnings Call
February 23, 2011 9:30 am ET
James O'Neil - President and Chief Operating Officer
James Haddox - Chief Financial Officer
Previous Statements by PWR
» Quanta Services CEO Discusses Q3 2010 Results - Earnings Call Transcript
» Quanta Services, Inc. Q4 2008 Earnings Call Transcript
» Quanta Services, Inc. Q3 2008 Earnings Call Transcript
Kip Rupp - Founder and Managing Partner
Alexander Rygiel - FBR Capital Markets & Co.
Stephen Sanders - Stephens Inc.
Stuart Bush - RBC Capital Markets, LLC
Craig Irwin - Wedbush Securities Inc.
Tahira Afzal - KeyBanc Capital Markets Inc.
Steven Gambuzza - Longbow Capital
Carter Shoop - Deutsche Bank AG
Adam Thalhimer - BB&T Capital Markets
Jeffrey Beach - Stifel, Nicolaus & Co., Inc.
John Rogers - D.A. Davidson & Co.
William Bremer - Maxim Group LLC
Daniel Mannes - Avondale Partners, LLC
Will Gabrielski - Gleacher & Company, Inc.
Michael Coleman - Sterne Agee & Leach Inc.
Peter Chang - Credit Suisse
Ladies and gentlemen, thank you for standing by, and welcome to the Quanta Services Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Kip Rupp with DRG&L. Please go ahead, sir.
Great, thank you, Taddeo, and welcome, everyone, to Quanta Services conference call to review 2010 fourth quarter and full year results.
Before I turn the call over to management, I have the normal housekeeping details to run through. If you would like to be on the email or fax distribution list to receive future press releases for Quanta, or if you had any technical difficulty this morning and did not receive your email or fax, please call our offices at DRG&L at (713) 529-6600. You can also sign up for email information alerts by going to the Investors & Media section of Quanta Services website at quantaservices.com.
If you would like to listen to a replay of today's call, it will be available via webcast by also going to Quanta's website at quantaservices.com. In addition, there's a telephonic recorded instant replay that will be available for the next seven days, 24 hours a day, that can be accessed as set forth in the press release. Please remember that the information reported on this call speaks only as of today, February 23, 2011, and therefore you're advised that any time-sensitive information may no longer be accurate as of the time of any replay of this call. This conference call will include forward-looking statements intended to qualify under the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include any statements reflecting Quanta's expectations, intentions, assumptions or beliefs about future events or performance or that do not solely relate to historical or current facts. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict or are beyond Quanta's control, and actual results may differ materially from those expected or implied as forward-looking statements. Management cautions that you should not place undue reliance on Quanta's forward-looking statements, and Quanta does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after this call.
For additional information concerning some of the risks, uncertainties and assumptions that could affect Quanta's forward-looking statements, please refer to the company's annual report on Form 10-K for the year ended December 31, 2009, its quarterly reports on Form 10-Q and its other documents filed with the Securities and Exchange Commission, which may be obtained through the SEC's website at sec.gov. With that, I would now like to turn the call over to Mr. John Colson, Quanta's Chairman and CEO. John?
Good morning, everyone, and welcome to the Quanta Services fourth quarter 2010 conference call. To start the call this morning, I will provide a summary of the quarter results with added insight on the impact of current industry circumstances and overall economic conditions. My comments will be followed by an operational review by Jim O'Neil, President and Chief Operating Officer; and a review of our financial results by James Haddox, our Chief Financial Officer. Following our remarks, we will welcome your questions.
Revenues for the fourth quarter increased to $1.1 billion compared to $985 million in the prior year's fourth quarter. Fourth quarter and full year revenues for 2010 include revenues of approximately $25.7 million from Valard Construction which was acquired October 25, 2010.
Revenues for the full year 2010 were $3.93 billion compared to $3.32 billion in 2009. While revenues were strong in the quarter, we continue to experience margin pressure in the Natural Gas and Pipeline segment of our business. We discussed this at the end of the third quarter. While this had a near-term impact on our financial results, it does not reflect a change in our approach to bidding this work at acceptable margins. Although we are happy that 2010 is over and hopefully taken the recession with it, our accomplishments were significant and many during the year.
During the year, we had $116 million of free cash flow which James will discuss later. We significantly expanded our Canadian presence with the acquisition of Valard Construction. We supported transmission reliability efforts through the application of our project management, engineering and construction services, both energized and de-energized for various utilities throughout the United States. We initiated construction of the first transmission lines as part of the Texas Competitive Renewable Energy Zone, or CREZ program, to support delivery of renewable energy. We've provided construction services on more than 700 miles of transmission pipeline across nine states in Canada. We secured our first construction projects under the broadband stimulus program awards with this momentum continuing with ongoing awards for engineering and construction services.
We secured contracts and initiated construction of 70 megawatts of solar facilities through 17 projects in the United States and Canada, and we strategically strengthened our international operations.
We're optimistic that 2011 will bring increased visibility and additional project activity for several reasons. One, a strength in the economy. A recent poll of economists by The Wall Street Journal predicts that the U.S. economy will grow at better than 3% this year. Two, if the first seven weeks of the year are an indication of what the year holds for our Electric Power segment, we expect a significant increase in project activity in 2011. Transmission projects awarded in 2010 such as Sunrise Powerlink and Tehachapi are beginning construction, while other much anticipated transmission projects such as CapX2020 and Central Maine Power have progressed with construction contract awards. Three, we are also beginning to see awards related to the Texas Competitive Renewable Energy Zone or CREZ. Today, I am proud to announce that we have been awarded two contracts by Lone Star Transmission as part of its plan to help deliver clean, renewable energy through CREZ transmission line construction. Jim will provide more information on these projects during his remarks.