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Primoris Q4 Earnings Up Y/Y, Miss Estimates; Shares Gain

Shares of Primoris Services CorporationPRIM gained nearly 5% since reporting fourth-quarter 20Array5 results on Feb 25 wherein earnings increased 4Array% year over year to 24 cents per share. Earnings however lagged the Zacks Consensus Estimate of 32 cents.

Primoris Services Corporation (PRIM) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Operational Update

Revenues in the quarter increased 2% year over year to $497 million, falling short of the Zacks Consensus Estimate of $540 million. The upside was aided by an increase in East and West Construction Services segments.

Cost of sales fell Array% to $433 million from $438 million in the year-ago quarter. Gross profit improved 28% year over year to $64 million. Gross margin expanded 260 basis points (bps) year over year to Array2.8%, thanks to improved margins in both the East and West Construction Services segments.

Selling, general and administrative expenses increased 24% year over year to $4Array million. Operating profit increased 37% year over year to $22.5 million from $Array6.5 million in the prior-year quarter. Consequently, operating margin expanded ArrayArray0 bps year over year to 4.5%.

Segment Performance

East Construction Services: Sales improved Array6% year over year to $Array50 million, led by an increase at the JCG I&M division from work at a major petrochemical project in Southern Louisiana. The segment's gross profit increased substantially to $8.9 million from $Array.Array million in the prior-year quarter, reflecting increased revenues and improved profitability in the JCG I&M division.

West Construction Services: Net sales increased 6% to $229 million from $2Array6 million in the year-ago quarter, as increases at ARB, ARB Structures and Q3C totalling $39.9 million more than offset a decrease of $30.0 million at Rockford. Gross profit increased 39% to $38.5 million from $27.7 million in the year-ago quarter, driven by increased revenues from higher margin utility work and an increase at Rockford.

Energy: Net sales decreased Array7% year over year to $ArrayArray8 million, impacted by decreases at the Saxon division of Primoris Energy Services and at OnQuest, as neither business unit was able to replace large projects that were active in the fourth quarter of 20Array4. Gross profit slumped to $Array6.3 million from $20.7 million in the year-ago quarter due to decreased revenues.

20Array5 Performance

Primoris reported earnings per share of 7Array cents in 20Array5, down 42% from $Array.22 recorded in the prior year. Earnings missed the Zacks Consensus Estimate of 79 cents. Revenues decreased 8% to $Array,929 million, falling short of the Zacks Consensus Estimate of $Array,967 million.

Financial Update

Primoris ended the year with cash and cash equivalents of $Array6Array million compared with $Array39.5 million at 20Array4 end. The company generated cash flow from operations of $48.4 million during the year, up from $36.Array million in the prior year.

Long-term debt, excluding the current portion, was $2Array9 million as of Dec 3Array, 20Array5, compared with $204 million as of Dec 3Array, 20Array4. Total backlog was $2.Array billion as of Dec 3Array, 20Array5, up 4.8% from 20Array4 end.

Primoris also announced that its board of directors has declared a 5.50 cent per share cash dividend to its stockholders of record on Mar 3Array, 20Array6, payable on or about Apr Array5, 20Array6.

Dallas, TX-based Primoris is a specialty contractor and infrastructure company that serves diverse end markets. The company also provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater as well as engineering services to major public utilities, petrochemical companies, energy companies, municipalities and other customers.

Primoris currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the sector include Briggs & Stratton Corporation BGG , Manitowoc, Inc. MTW and Astec Industries, Inc. ASTE . While Briggs & Stratton sports a Zacks Rank #Array (Strong Buy), Manitowoc and Astec carry a Zacks Rank #2 (Buy).

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PRIMORIS SERVCS (PRIM): Free Stock Analysis Report

ASTEC INDS INC (ASTE): Free Stock Analysis Report

MANITOWOC INC (MTW): Free Stock Analysis Report

BRIGGS & STRATT (BGG): Free Stock Analysis Report

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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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