Quanta Services, Inc. (PWR Quick QuotePWR - Free Report) is scheduled to report third-quarter 2024 results on Oct. 31, before the opening bell.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

In the last reported quarter, PWR’s earnings missed the Zacks Consensus Estimate by 1.6% but rose 15.2% year over year. Revenues surpassed the consensus mark by 1.5% and increased 10.8% year over year.

Encouragingly, earnings topped analysts’ expectations in 19 of the trailing 21 quarters.

PWR’s Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter EPS has decreased to $2.66 from $2.70 in the past 30 days. The estimated figure indicates an 18.8% increase from the year-ago EPS of $2.24.

The consensus mark for revenues is pegged at $6.55 billion, implying a 16.6% year-over-year rise.

Factors to Note for PWR’s Q3 Performance

Quanta Services' earnings and revenues are expected to have increased year over year in the third quarter of 2024, driven by the strategic implementation and utilization of technological solutions covering a wide range of initiatives to reduce carbon emissions. These initiatives include carbon management, mitigation, compliance consulting and the development of essential infrastructure to support the delivery of clean, carbon-free energy solutions.

PWR has been leveraging key industry trends to lead energy transition and drive technological advancements. 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 in the third quarter.

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.

PWR expects segment revenues to grow sequentially. The company also anticipates operating margin to reach its highest level in the third quarter.

For the Electric Power segment, our model predicts segment revenues to grow 17.7% year over year to $2.93 billion from a year ago. Operating margin is expected to be 13.9% in the quarter, up from 11.9% 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.

The company expects third-quarter segment revenues to increase sequentially, marking the highest revenue quarter of the year. The operating margin in the quarter is also anticipated to peak, followed by a typical seasonal decline in the fourth quarter.

For the Underground Utility and Infrastructure Solutions segment, our model predicts revenues to decline 4.2% year over year to $1.33 billion from a year ago. Operating margin is expected to be 8.3% in the quarter, down from 8.9% from a year ago but up from 7.4% in the prior quarter.

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.

The company expects segment revenues to grow sequentially.

For the Renewable Energy Infrastructure Solutions segment, our model predicts revenues to grow 32.5% year over year to $2.31 billion from a year ago. Operating margin is expected to be 9.9% in the quarter, up from 8.7% a year ago.

What the Zacks Model Predicts for PWR

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. This is not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PWR’s Earnings ESP: The company has an Earnings ESP of -0.47% at present.

Zacks Rank: Quanta Services currently carries a Zacks Rank #3.

Stocks With Favorable Combination

Here are some 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.

Louisiana-Pacific Corporation (LPX Quick QuoteLPX - Free Report) has an Earnings ESP of +2.29% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. 

LPX reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 25.2%. The company’s earnings for the to-be-reported quarter are expected to have declined 45.7%. 

Toll Brothers, Inc. (TOL Quick QuoteTOL - Free Report) currently has an Earnings ESP of +2.35% and a Zacks Rank of 2. 

TOL’s earnings for the to-be-reported quarter are expected to have increased 4.9%. The company reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 7.8%. 

Howmet Aerospace Inc. (HWM Quick QuoteHWM - Free Report) currently has an Earnings ESP of +0.48% and a Zacks Rank of 2.

HWM’s earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.9%. Earnings for the to-be-reported quarter are expected to have increased 41.3% year over year.