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In the last reported quarter, the company’s adjusted earnings per share (EPS) and revenues surpassed the Zacks Consensus Estimate by 3.6% and 12.3%, respectively. On a year-over-year basis, total revenues increased 31%, and EPS grew 21.4%.
Encouragingly, earnings topped analysts’ expectations in 18 of the trailing 19 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter EPS has decreased to $1.26 from $1.28 over the past 30 days. The estimated figure indicates a 1.6% increase from the year-ago EPS of $1.24. The consensus mark for revenues is pegged at $4.96 billion, suggesting an 11.9% year-over-year rise.
From the seasonal perspective, Quanta Services’ traditionally experiences lower business activity in the first quarter, impacting revenues and pressurizing margins.
Nonetheless, apart from the seasonal perspective, Quanta Services is expected to have experienced a positive impact in the quarter through the implementation and utilization of technological solutions that cover a wide range of initiatives aimed at reducing carbon emissions. These initiatives encompass carbon management, mitigation, and compliance consulting, as well as the development of essential infrastructure to support the delivery of clean, carbon-free energy solutions. The company has been capitalizing on the megatrends to lead the energy transition and enable technological development. Initiatives such as electric vehicle charging infrastructure and undergrounding of electrical infrastructure are gaining momentum. These factors are likely to have helped the company boost its profit level to some extent.
Segment-wise, the Electric Power Infrastructure Services segment (which accounted for 46.5% of total revenues in 2023) is likely to have benefited from broad-based business strength driven by ongoing grid modernization, system hardening, renewable energy interconnections and solid execution. Also, contributions from larger transmission projects underway in Canada and revenues from the acquired businesses are likely to have supported bottom-line growth in the to-be-reported quarter.
However, from a seasonality perspective, PWR expects segment revenues to be similar to the year-ago period. The company also expects operating margin to be between 8.5% and 9%, the lowest for the year.
For the Electric Power segment, our model predicts segment revenues to remain unchanged year over year to $2.34 billion from a year ago. Operating margin is expected to be 8.8% in the quarter, down from 9.2% a year ago.
The Underground Utility and Infrastructure Solutions segment (which accounted for 24% of total revenues in 2023) has been benefiting from higher demand for gas utility and pipeline integrity services and pent-up demand for the services that were deferred due to the effects of COVID-19 on the downstream market.
For the Underground Utility and Infrastructure Solutions segment, our model predicts revenues to decline 0.9% year over year to $1.07 billion from a year ago. Operating margin is expected to be 5.8% in the quarter, up 10 basis points (bps) from a year ago.
Meanwhile, the Renewable Energy Infrastructure Solutions segment (29.5%) consists of services and solutions for infrastructure supporting the delivery of renewable energy, including renewable generation, electric transmission, substations and battery storage, with Blattner's operations representing the majority of those solutions. This addition is expected to have contributed to the company’s top line in the to-be-reported quarter.
For the Renewable Energy Infrastructure Solutions segment, our model predicts revenues to grow 49.2% year over year to $1.5 billion from a year ago. Operating margin is expected to be 6.9% in the quarter, up from 3.5% a year ago.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Quanta Services this time around. A 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The company has an Earnings ESP of -0.90%.
Zacks Rank: Quanta Services currently carries a Zacks Rank #3.
Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to beat on earnings in their respective quarters to be reported.
BLD’s earnings for the to-be-reported quarter are expected to increase 4.6%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 12.4%.
Fluor Corporation (FLR - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank #3.
FLR’s earnings for the to-be-reported quarter are expected to grow 92.9%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 47.9%.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +0.36% and has a Zacks Rank #3.
BCC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 20.4%. Earnings for the to-be-reported quarter are expected to decline 5.4% year over year.
Image: Bigstock
Quanta Services (PWR) to Post Q1 Earnings: What to Expect
Quanta Services, Inc. (PWR - Free Report) is scheduled to report first-quarter 2024 results on May 2, before the opening bell.
In the last reported quarter, the company’s adjusted earnings per share (EPS) and revenues surpassed the Zacks Consensus Estimate by 3.6% and 12.3%, respectively. On a year-over-year basis, total revenues increased 31%, and EPS grew 21.4%.
Encouragingly, earnings topped analysts’ expectations in 18 of the trailing 19 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter EPS has decreased to $1.26 from $1.28 over the past 30 days. The estimated figure indicates a 1.6% increase from the year-ago EPS of $1.24. The consensus mark for revenues is pegged at $4.96 billion, suggesting an 11.9% year-over-year rise.
Quanta Services, Inc. Price and EPS Surprise
Quanta Services, Inc. price-eps-surprise | Quanta Services, Inc. Quote
Factors to Note
From the seasonal perspective, Quanta Services’ traditionally experiences lower business activity in the first quarter, impacting revenues and pressurizing margins.
Nonetheless, apart from the seasonal perspective, Quanta Services is expected to have experienced a positive impact in the quarter through the implementation and utilization of technological solutions that cover a wide range of initiatives aimed at reducing carbon emissions. These initiatives encompass carbon management, mitigation, and compliance consulting, as well as the development of essential infrastructure to support the delivery of clean, carbon-free energy solutions. The company has been capitalizing on the megatrends to lead the energy transition and enable technological development. Initiatives such as electric vehicle charging infrastructure and undergrounding of electrical infrastructure are gaining momentum. These factors are likely to have helped the company boost its profit level to some extent.
Segment-wise, the Electric Power Infrastructure Services segment (which accounted for 46.5% of total revenues in 2023) is likely to have benefited from broad-based business strength driven by ongoing grid modernization, system hardening, renewable energy interconnections and solid execution. Also, contributions from larger transmission projects underway in Canada and revenues from the acquired businesses are likely to have supported bottom-line growth in the to-be-reported quarter.
However, from a seasonality perspective, PWR expects segment revenues to be similar to the year-ago period. The company also expects operating margin to be between 8.5% and 9%, the lowest for the year.
For the Electric Power segment, our model predicts segment revenues to remain unchanged year over year to $2.34 billion from a year ago. Operating margin is expected to be 8.8% in the quarter, down from 9.2% a year ago.
The Underground Utility and Infrastructure Solutions segment (which accounted for 24% of total revenues in 2023) has been benefiting from higher demand for gas utility and pipeline integrity services and pent-up demand for the services that were deferred due to the effects of COVID-19 on the downstream market.
For the Underground Utility and Infrastructure Solutions segment, our model predicts revenues to decline 0.9% year over year to $1.07 billion from a year ago. Operating margin is expected to be 5.8% in the quarter, up 10 basis points (bps) from a year ago.
Meanwhile, the Renewable Energy Infrastructure Solutions segment (29.5%) consists of services and solutions for infrastructure supporting the delivery of renewable energy, including renewable generation, electric transmission, substations and battery storage, with Blattner's operations representing the majority of those solutions. This addition is expected to have contributed to the company’s top line in the to-be-reported quarter.
For the Renewable Energy Infrastructure Solutions segment, our model predicts revenues to grow 49.2% year over year to $1.5 billion from a year ago. Operating margin is expected to be 6.9% in the quarter, up from 3.5% a year ago.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Quanta Services this time around. A 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The company has an Earnings ESP of -0.90%.
Zacks Rank: Quanta Services currently carries a Zacks Rank #3.
Stocks With Favorable Combination
Here are some other companies in the Zacks Construction sector, which according to our model, have the right combination of elements to beat on earnings in their respective quarters to be reported.
TopBuild (BLD - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
BLD’s earnings for the to-be-reported quarter are expected to increase 4.6%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 12.4%.
Fluor Corporation (FLR - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank #3.
FLR’s earnings for the to-be-reported quarter are expected to grow 92.9%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 47.9%.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +0.36% and has a Zacks Rank #3.
BCC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 20.4%. Earnings for the to-be-reported quarter are expected to decline 5.4% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.