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Quanta Services (PWR) Q4 Earnings & Revenues Beat Estimates

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Quanta Services Inc.PWR reported fourth-quarter 2017 adjusted earnings of 45 cents per share, surpassing the Zacks Consensus Estimate by a penny.

The company's GAAP earnings from continuing operations came in at 72 cents, up 26.3% from the prior-year quarter's 57 cents. Bottom-line growth can be attributable to a robust top line and sound execution of projects.

In full-year 2017, non-GAAP earnings from continuing operations came in at $1.97, up over 30.5% from the year-ago quarter tally of $1.51 per share.

Inside the Headlines

Total revenues in the quarter came in at $2,478.6 million, up an impressive 17.9% on a year-over-year basis. Additionally, the figure trumped the Zacks Consensus Estimate of $2,344 million. Impressive revenues growth at the Electric Power Infrastructure Services as well as Oil and Gas Infrastructure Services segments acted as the primary catalyst.

Of the total quarterly revenues, the Electric Power Infrastructure segment accounted for 63.5%, and the Oil and Gas Infrastructure segment represented 36.5%.

As per segments, revenues from Electric Power Infrastructure were up 22.8% year over year to $1,574.9 million. Oil and Gas Infrastructure segmental revenues increased 10.1% to $903.8 million.

In full-year 2017, the company posted revenues of $9.47 billion, up 23.8% year over year.

In the reported quarter, operating income came in at $53.6 million compared with the prior-year figure of $117.9 million.

Quanta Services, Inc. Price, Consensus and EPS Surprise

Quanta Services, Inc. Price, Consensus and EPS Surprise | Quanta Services, Inc. Quote

At the end of Dec 31, 2017, Quanta Services' consolidated total backlog totaled $6,446.2 million.

Liquidity

Quanta Services exited the quarter with cash and cash equivalents of $138.3 million, up from $112.2 million as of Dec 31, 2016. At quarter end, the company's long-term debt and notes payable was $670.7 million, up from $353.6 million as of Dec 31, 2016.

Notable Developments

After the end of the quarter, Quanta Services secured two large diameter mainline pipeline projects in the United States' Appalachian region. Moreover, in January 2018, the company signed a large electric transmission project contract in south Florida to offer construction services. This apart, in the same time period, the company acquired an electrical infrastructure services business and Northwest Lineman College, both of which are based in the United States.

In the reported quarter, Quanta Services made a repurchase of 1.4 million shares of common stock worth $50.0 million.

Guidance

Concurrent with the earnings release, Quanta Services provided its full-year 2018 earnings and revenues guidance. The company projects adjusted earnings per share from continuing operations in the range of $2.40-$2.80. For 2018, Quanta Services anticipates revenues in the band of $9.75-$10.25 billion.

Our Take

Quanta Services reported better-than-expected fourth-quarter results on the back of solid top-line growth. Meanwhile, the company remains optimistic about the prospects of its end markets in both of its segments namely, Electric Power Infrastructure as well as Oil & Gas Infrastructure segments, over the next couple of years.

Furthermore, the Zacks Rank #2 (Buy) company's communications infrastructure services business is performing brilliantly. Also, the company's oil and gas segment outlook looks promising, primarily owing to the improving mainline and natural gas distribution, and integrity markets. Going forward, the company continues to expect healthy levels of base load work including supporting midstream infrastructure, downstream support services and natural gas distribution.

Other Stocks to Consider

A few better-ranked stocks in the same space include TopBuild Corp. BLD , D.R. Horton, Inc. DHI and Jacobs Engineering Group Inc. JEC . While TopBuild sports a Zacks Rank #1 (Strong Buy), D.R. Horton and Jacobs Engineering carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

TopBuild has an impressive earnings surprise history, surpassing estimates in the trailing four quarters with an average beat of 10.3%.

D.R. Horton has a modest earnings surprise history, surpassing estimates thrice in the trailing four quarters with an average beat of 5.8%.

Jacobs Engineering has an excellent earnings surprise history, exceeding estimates in the trailing four quarters with an average beat of 11.4%.

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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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