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Quanta (PWR) to Report Q3 Earnings: What's in the Cards?

Quanta Services, Inc. PWR is scheduled to report third-quarter 2020 results on Oct 29, before the opening bell.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 54.2% but revenues missed the same by 1.2%. On a year-over-year basis, its earnings grew 138.7% but revenues dropped 11.7%.

Quanta’s earnings topped the consensus mark in three of the last four quarters and met on another occasion, with the average positive surprise being 18.6%.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings for the quarter to be reported has increased 2.8% over the past 30 days to $1.11 per share. The said figure indicates a 2.6% decrease from the year-ago earnings of $1.14 per share. However, the consensus mark for revenues is $3.02 billion, suggesting 9.9% year-over-year fall.

Quanta Services, Inc. Price and EPS Surprise

Quanta Services, Inc. Price and EPS Surprise

Quanta Services, Inc. price-eps-surprise | Quanta Services, Inc. Quote

Factors to Note

Quanta’s third-quarter revenues are expected to have been hit by lower contribution from the Pipeline and Industrial segment, given challenges in the broader energy market. Overall energy markets have been facing challenges due to the COVID-19 outbreak. Customers have been restricting onsite activity for the company’s other services. Also, they have been deferring maintenance and certain turnaround projects to the latter part of this year or 2021. Its Pipeline and Industrial Infrastructure Services segment’s results are likely to reflect the effects of COVID-related restrictions and low oil prices. The consensus estimate for the segment’s revenues is pegged at $900 million, implying a decrease of 39.1% from the year-ago period.

Meanwhile, robust spending by electric utilities on grid modernization and infrastructure hardening — particularly in the western United States — as well as by gas utilities on distribution system modernization and safety programs is likely to have benefited the Electric Power segment. It is important to note that approximately 65% of Quanta's revenues are directly tied to regulated electric and gas utility customers, which is core to the business. Also, throughout its service territories, it actively pursued billions of dollars of larger electric transmission projects with minimal disruption.

The Zacks Consensus Estimate for the segment’s revenues is pegged at $2,081 million, implying 10.9% growth from a year ago.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Quanta this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: The company has an Earnings ESP of +0.81%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Masco Corporation MAS has an Earnings ESP of +2.23% and holds a Zacks Rank #2.

Installed Building Products, Inc. IBP has an Earnings ESP of +2.12% and carries a Zacks Rank #2.

D.R. Horton, Inc. DHI has an Earnings ESP of +3.48% and carries a Zacks Rank #3.

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Quanta Services, Inc. (PWR): 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.

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