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Dycom Keeps Earnings Streak Alive in Q1 on Revenue Growth

The earnings surprise history of Dycom Industries Inc. DY continued its positive momentum for the fifth consecutive quarter. The specialty contracting services provider firm reported first-quarter fiscal 2016 adjusted earnings per share of $1.24, surpassing the Zacks Consensus Estimate of $1.01 by 22.8%. The bottom line also more than doubled from the year-ago tally of 59 cents per share.

Encouragingly, quarterly earnings came significantly higher than the company's guided range of 96 cents to $1.04. The stellar performance was primarily attributable to solid revenue growth in the quarter.

Dycom Industries Inc. (DY) - Earnings Surprise | FindTheCompany

Inside the Headlines

Dycom's first-quarter fiscal 2016 revenues came in at $659.3 million, representing about 29.2% year-over-year improvement. Also, the top line comfortably surpassed the Zacks Consensus Estimate of $626 million. Contract revenues grew 21.9% on an organic basis. Nevertheless, acquisitions significantly supplemented the revenue stream, adding $39.5 million in revenues.

Impressive top-line growth was supported by the company's improved operational performance, strong customer spending and acquisition-driven benefits.

The company reported non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $105.7 million for the quarter compared with $66.4 million recorded a year ago.

Liquidity

Dycom exited the quarter with cash and cash equivalents of $21.8 million compared with $21.3 million as of Jul 25, 2015. The company's long-term debt was $636.0 million as of Oct 24, 2015 compared with $521.8 million as of Jul 25, 2015.

Guidance

Dycom provided outlook for second-quarter fiscal 2016. The company expects earnings per share in the range of 52-60 cents on revenues of $530-$550 million.

The Zacks Consensus Estimate for second-quarter fiscal 2016 earnings is currently pegged at 39 cents per share, which stands well below the company's guided range but is likely to be revised upward in the future.

To Conclude

We believe Dycom's business is reaping considerable benefits from increased demand for network bandwidth and mobile broadband, given the proliferation of smartphones. Of late, the company's engineering & design, and aerial & underground construction services have been experiencing solid growth, backed by the strength of 1-gigabit deployments. Additionally, with rapid rise in cable expenditure and increasing use of cable fiber in small and medium businesses, the company's prospects shine bright.

Moreover, backed by a robust client portfolio, including telecom and wireless equipment biggies such as AT&T, Inc. T , CenturyLink CTL and Verizon Communications Inc. VZ , and historically strong backlog levels, this Zacks Rank #1 (Strong Buy) stock shows promise.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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