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Factors Setting the Tone for Dycom (DY) in Q2 Earnings
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Dycom Industries, Inc. (DY - Free Report) is scheduled to report second-quarter fiscal 2019 numbers on Aug 29. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by a margin of 4.4%.
Q2 Expectations
The question lingering on investors’ minds now is whether Dycom will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.06, lower than $1.47 in the year-ago quarter. Additionally, over the past 30 days, the company’s earnings have witnessed a downward revision of 12 cents, reflecting analysts’ concern surrounding the stock. In the fiscal first quarter, the company’s bottom line declined 50% on a year-over-year basis.
Meanwhile, the Zacks Consensus Estimate for revenues stands at $806.8 million, reflecting a 3.4% increase from the prior-year quarter’s actual figure.
Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.
Factors at Play
In the to-be-reported quarter, Dycom’s results are likely to be impacted by the timing of activity on large customer programs. Also, the company’s margins are likely to suffer due to timing volatility, customer spending modulations and an adverse mix of work activities. Further, under absorption of labor and field costs might continue to dent margins.
Notably, Dycom derives a significant portion of its revenues from master service agreements and long-term contracts, which might be canceled at the discretion of customers. For instance, in first-quarter fiscal 2019, the company’s contract revenues came in at $731.4 million, down 7% year over year. The decline can be attributed to a near-term moderation in spending by an important customer as well as revenue declines from certain other customers. Organically, revenues from Dycom’s top five customers declined 8.8%, while the same from all other customers decreased 14.2%.
Recently, the company lowered guidance for second-quarter. Given weaker-than-expected business so far this year, Dycom now expects adjusted earnings (excluding non-recurring items) for the quarter to be reported in the range of $1.05-$1.08 per share. The current expectation is considerably lower than earlier guided range of $1.13-$1.28 per share. Contract revenues are now estimated to be $799.5 million ($830-$860 million projected previously).
Dycom Industries, Inc. Price, Consensus and EPS Surprise
Our proven model does not show that Dycom is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dycom has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell).
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Peer Releases
MasTec, Inc. (MTZ - Free Report) reported mixed results in the second quarter of 2018, wherein earnings surpassed analysts’ expectations while revenues lagged the same. Adjusted earnings of $1.04 per share surpassed the Zacks Consensus Estimate as well as the prior-year quarter’s figure of $1.03 by 1%.
Granite Construction (GVA - Free Report) second-quarter 2018 earnings of 43 cents per share missed the Zacks Consensus Estimate of 92 cents per share.
Orion Marine Group (ORN - Free Report) reported second-quarter earnings of 8 cents per share, beating the consensus mark of a penny.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Factors Setting the Tone for Dycom (DY) in Q2 Earnings
Dycom Industries, Inc. (DY - Free Report) is scheduled to report second-quarter fiscal 2019 numbers on Aug 29. In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by a margin of 4.4%.
Q2 Expectations
The question lingering on investors’ minds now is whether Dycom will be able to deliver a positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.06, lower than $1.47 in the year-ago quarter. Additionally, over the past 30 days, the company’s earnings have witnessed a downward revision of 12 cents, reflecting analysts’ concern surrounding the stock. In the fiscal first quarter, the company’s bottom line declined 50% on a year-over-year basis.
Meanwhile, the Zacks Consensus Estimate for revenues stands at $806.8 million, reflecting a 3.4% increase from the prior-year quarter’s actual figure.
Let’s delve deeper to find out how the company’s top and bottom line will shape up this earnings season.
Factors at Play
In the to-be-reported quarter, Dycom’s results are likely to be impacted by the timing of activity on large customer programs. Also, the company’s margins are likely to suffer due to timing volatility, customer spending modulations and an adverse mix of work activities. Further, under absorption of labor and field costs might continue to dent margins.
Notably, Dycom derives a significant portion of its revenues from master service agreements and long-term contracts, which might be canceled at the discretion of customers. For instance, in first-quarter fiscal 2019, the company’s contract revenues came in at $731.4 million, down 7% year over year. The decline can be attributed to a near-term moderation in spending by an important customer as well as revenue declines from certain other customers. Organically, revenues from Dycom’s top five customers declined 8.8%, while the same from all other customers decreased 14.2%.
Recently, the company lowered guidance for second-quarter. Given weaker-than-expected business so far this year, Dycom now expects adjusted earnings (excluding non-recurring items) for the quarter to be reported in the range of $1.05-$1.08 per share. The current expectation is considerably lower than earlier guided range of $1.13-$1.28 per share. Contract revenues are now estimated to be $799.5 million ($830-$860 million projected previously).
Dycom Industries, Inc. Price, Consensus and EPS Surprise
Dycom Industries, Inc. Price, Consensus and EPS Surprise | Dycom Industries, Inc. Quote
What Does the Zacks Model Unveil?
Our proven model does not show that Dycom is likely to beat earnings estimates in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dycom has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Peer Releases
MasTec, Inc. (MTZ - Free Report) reported mixed results in the second quarter of 2018, wherein earnings surpassed analysts’ expectations while revenues lagged the same. Adjusted earnings of $1.04 per share surpassed the Zacks Consensus Estimate as well as the prior-year quarter’s figure of $1.03 by 1%.
Granite Construction (GVA - Free Report) second-quarter 2018 earnings of 43 cents per share missed the Zacks Consensus Estimate of 92 cents per share.
Orion Marine Group (ORN - Free Report) reported second-quarter earnings of 8 cents per share, beating the consensus mark of a penny.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>