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Quanta Services Inc. (PWR - Free Report) reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.
See the Zacks Earnings Calendar to stay ahead of market-making news.
However, shares of this leading national provider of specialty contracting services declined 3.7% following the release on Oct. 31.
Quanta reported a strong quarter with double-digit growth across key financial metrics, a record backlog of $34 billion and $539.5 million in free cash flow. CEO Duke Austin attributed this growth to Quanta’s diverse portfolio, high demand, effective execution and an expanding market.
Quanta Services, Inc. Price, Consensus and EPS Surprise
Quanta’s adjusted earnings per share (EPS) of $2.72 topped the consensus estimate of $2.66 by 2.3% and increased 21.4% from the year-ago quarter’s $2.24.
Total revenues of $6.49 billion missed the consensus mark of $6.56 billion by 0.9% but increased 15.5% year over year. The growth was supported by robust demand for its services, propelled by customers' multi-year initiatives aimed at modernizing and fortifying utility infrastructure, expanding renewable energy generation and transmission infrastructure and transitioning toward a low-carbon economy.
However, the operating margin for the quarter contracted 50 basis points (bps) to 6.6% from a year ago. Adjusted EBITDA of $682.8 million improved 15.2% from the year-ago quarter.
The company reported a 12-month backlog of $19.13 billion and a total backlog of $33.96 billion at the end of September. This compares with the December 2023-end 12-month backlog of $17.23 billion and the total backlog of $30.11 billion. In the year-ago period, the 12-month backlog stood at $17.02 billion and the total backlog at $30.1 billion.
PWR’s Segment Details
The company reports results under three segments — Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions, and Underground Utility and Infrastructure Solutions.
Revenues from Electric Power Infrastructure Solutions totaled $2.98 billion, which grew 19.8% year over year. The operating margin remained flat at 11.9% in the quarter year over year. The segment’s 12-month backlog was $10.21 billion, up from $8.36 billion in 2023 and $8 billion in the year-ago quarter. The total backlog was $19.95 billion compared with $15.5 billion at 2023-end and $15.42 billion at September 2023-end.
Revenues from Renewable Energy Infrastructure Solutions totaled $2.25 million, up 28.9% year over year. Operating margins expanded 110 basis points from the year-ago level to 9.8%.
The segment’s 12-month backlog was $5.53 billion, down from $5.82 billion at September 2023-end and down from $5.63 billion at 2023-end. The total backlog of $7.57 billion decreased from $7.92 billion at September 2023-end and $8.13 billion at 2023-end.
Within the Underground Utility and Infrastructure Solutions segment, revenues declined 9.1% from the prior-year quarter’s levels to $1.26 billion. The operating margin of 7.4% was down 140 bps from the prior-year quarter. The segment’s 12-month backlog totaled $3.38 billion, up from $3.2 billion at September 2023-end and $3.24 billion at 2023-end. The total backlog decreased to $6.44 billion from $6.48 billion at 2023-end and $6.76 billion at September 2023-end.
PWR’s Liquidity
As of Sept. 30, 2024, Quanta had cash and cash equivalents of $764.1 million, down from $1.29 billion at 2023-end. The company’s long-term debt (net of current maturities) amounted to $4.13 billion, up from $3.66 billion as of Dec. 31, 2023.
Net cash provided by operating activities was $739.9 million in the third quarter, up from $406.6 million a year ago. Free cash flow (FCF) in the quarter was $539.5 million, up from $279.8 million reported in the year-ago quarter.
PWR Narrows 2024 Guidance
Quanta now expects revenues between $23.5 billion and $23.9 billion compared with the prior projection of $23.5 billion and $24.1 billion. The company reported revenues of $20.9 billion in 2023.
The company now expects adjusted EPS in the range of $8.50-$8.80 versus the prior projection of $8.32-$8.87. Adjusted EBITDA is now projected to be between $2.25 and $2.32 billion compared with the earlier projection of $2.21 and $2.33 billion. In 2023, PWR reported adjusted EPS of $7.16 and adjusted EBITDA of $1.95 billion.
Quanta’s FCF is now projected to be in the range of $1.30-$1.50 billion (versus an earlier projection in the band of $1.30-$1.70 billion).
Otis Worldwide Corporation (OTIS - Free Report) reported dismal results in the third quarter of 2024, with adjusted earnings and net sales missing the Zacks Consensus Estimate.
Otis reported lower-than-expected earnings in the quarter after four consecutive quarters of earnings beat. The top and bottom lines increased on a year-over-year basis.
Masco Corporation (MAS - Free Report) reported third-quarter 2024 results, wherein earnings met the Zacks Consensus Estimate and net sales marginally beat the same. Strong operational efficiency helped it deliver strong earnings amid challenging market conditions.
Masco lowered the upper limit of its 2024 adjusted earnings per share (EPS) guidance due to challenged market demand.
Armstrong World Industries, Inc. (AWI - Free Report) reported solid results for the third quarter of 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.
Given the solid third-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for adjusted EBITDA, adjusted earnings per share and adjusted free cash flow.
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Quanta's Q3 Earnings Beat Estimates, 2024 Guidance Narrowed
Quanta Services Inc. (PWR - Free Report) reported mixed results for the third quarter of 2024, wherein adjusted earnings beat the Zacks Consensus Estimate, but revenues missed the same.
See the Zacks Earnings Calendar to stay ahead of market-making news.
However, shares of this leading national provider of specialty contracting services declined 3.7% following the release on Oct. 31.
Quanta reported a strong quarter with double-digit growth across key financial metrics, a record backlog of $34 billion and $539.5 million in free cash flow. CEO Duke Austin attributed this growth to Quanta’s diverse portfolio, high demand, effective execution and an expanding market.
Quanta Services, Inc. Price, Consensus and EPS Surprise
Quanta Services, Inc. price-consensus-eps-surprise-chart | Quanta Services, Inc. Quote
More on PWR’s Q3 Results
Quanta’s adjusted earnings per share (EPS) of $2.72 topped the consensus estimate of $2.66 by 2.3% and increased 21.4% from the year-ago quarter’s $2.24.
Total revenues of $6.49 billion missed the consensus mark of $6.56 billion by 0.9% but increased 15.5% year over year. The growth was supported by robust demand for its services, propelled by customers' multi-year initiatives aimed at modernizing and fortifying utility infrastructure, expanding renewable energy generation and transmission infrastructure and transitioning toward a low-carbon economy.
However, the operating margin for the quarter contracted 50 basis points (bps) to 6.6% from a year ago. Adjusted EBITDA of $682.8 million improved 15.2% from the year-ago quarter.
The company reported a 12-month backlog of $19.13 billion and a total backlog of $33.96 billion at the end of September. This compares with the December 2023-end 12-month backlog of $17.23 billion and the total backlog of $30.11 billion. In the year-ago period, the 12-month backlog stood at $17.02 billion and the total backlog at $30.1 billion.
PWR’s Segment Details
The company reports results under three segments — Electric Power Infrastructure Solutions, Renewable Energy Infrastructure Solutions, and Underground Utility and Infrastructure Solutions.
Revenues from Electric Power Infrastructure Solutions totaled $2.98 billion, which grew 19.8% year over year. The operating margin remained flat at 11.9% in the quarter year over year. The segment’s 12-month backlog was $10.21 billion, up from $8.36 billion in 2023 and $8 billion in the year-ago quarter. The total backlog was $19.95 billion compared with $15.5 billion at 2023-end and $15.42 billion at September 2023-end.
Revenues from Renewable Energy Infrastructure Solutions totaled $2.25 million, up 28.9% year over year. Operating margins expanded 110 basis points from the year-ago level to 9.8%.
The segment’s 12-month backlog was $5.53 billion, down from $5.82 billion at September 2023-end and down from $5.63 billion at 2023-end. The total backlog of $7.57 billion decreased from $7.92 billion at September 2023-end and $8.13 billion at 2023-end.
Within the Underground Utility and Infrastructure Solutions segment, revenues declined 9.1% from the prior-year quarter’s levels to $1.26 billion. The operating margin of 7.4% was down 140 bps from the prior-year quarter. The segment’s 12-month backlog totaled $3.38 billion, up from $3.2 billion at September 2023-end and $3.24 billion at 2023-end. The total backlog decreased to $6.44 billion from $6.48 billion at 2023-end and $6.76 billion at September 2023-end.
PWR’s Liquidity
As of Sept. 30, 2024, Quanta had cash and cash equivalents of $764.1 million, down from $1.29 billion at 2023-end. The company’s long-term debt (net of current maturities) amounted to $4.13 billion, up from $3.66 billion as of Dec. 31, 2023.
Net cash provided by operating activities was $739.9 million in the third quarter, up from $406.6 million a year ago. Free cash flow (FCF) in the quarter was $539.5 million, up from $279.8 million reported in the year-ago quarter.
PWR Narrows 2024 Guidance
Quanta now expects revenues between $23.5 billion and $23.9 billion compared with the prior projection of $23.5 billion and $24.1 billion. The company reported revenues of $20.9 billion in 2023.
The company now expects adjusted EPS in the range of $8.50-$8.80 versus the prior projection of $8.32-$8.87. Adjusted EBITDA is now projected to be between $2.25 and $2.32 billion compared with the earlier projection of $2.21 and $2.33 billion. In 2023, PWR reported adjusted EPS of $7.16 and adjusted EBITDA of $1.95 billion.
Quanta’s FCF is now projected to be in the range of $1.30-$1.50 billion (versus an earlier projection in the band of $1.30-$1.70 billion).
PWR’s Zacks Rank & Recent Construction Releases
Quanta currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Otis Worldwide Corporation (OTIS - Free Report) reported dismal results in the third quarter of 2024, with adjusted earnings and net sales missing the Zacks Consensus Estimate.
Otis reported lower-than-expected earnings in the quarter after four consecutive quarters of earnings beat. The top and bottom lines increased on a year-over-year basis.
Masco Corporation (MAS - Free Report) reported third-quarter 2024 results, wherein earnings met the Zacks Consensus Estimate and net sales marginally beat the same. Strong operational efficiency helped it deliver strong earnings amid challenging market conditions.
Masco lowered the upper limit of its 2024 adjusted earnings per share (EPS) guidance due to challenged market demand.
Armstrong World Industries, Inc. (AWI - Free Report) reported solid results for the third quarter of 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.
Given the solid third-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for adjusted EBITDA, adjusted earnings per share and adjusted free cash flow.