We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Quanta Services (PWR) Up 27.6% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Quanta Services (PWR - Free Report) . Shares have added about 27.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Quanta Services due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Quanta Services Q1 Earnings In Line, Revenues Miss
Quanta Services Inc. reported first-quarter 2020 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same.
According to the company, 80-90% of its revenues are derived from utility, communications, and certain pipeline and industrial infrastructure services that will likely continue to be resilient, even in the present challenging environment. It expects to achieve record backlog during the year. Yet, it expects the second quarter to be the most challenging due to short-term disruptions.
Numbers in Detail
In the quarter under review, the company reported adjusted earnings of 47 cents per share that matched the consensus estimate but decreased 51% from the year-ago profit level.
Total revenues of $2.76 billion missed the consensus mark by 0.04% and decreased 1.5% year over year due to lower contribution from its Pipeline and Industrial Infrastructure Services segment.
Segment Details
The company reports results under two reportable segments: Electric Power Infrastructure Services segment (accounting for 63.9% of revenues), and Pipeline and Industrial Infrastructure Services (36.1%).
Revenues from Electric Power Infrastructure Services totaled $1,767 million, increasing 6.2% year over year. However, operating margins contracted 240 bps to 7.3%.
Within the Pipeline and Industrial Infrastructure Services segment, revenues declined 12.8% from the prior-year quarter to $997.1 million. Moreover, operating margins of 3.1% declined 50 bps year over year.
Operating Highlights
Operating margin during the quarter contracted 140 bps from a year ago to 2.9%. Adjusted EBITDA of $162.6 million declined 19.4% from $201.8 million a year ago.
As of Mar 31, 2020, the company reported total backlog of $14.7 billion and 12-month backlog of $7.6 billion. This compares favorably with $12.6 billion of total backlog and $6.9 billion of 12-month backlog a year ago. However, the reported metrics were down from fourth quarter-end respective figures of $15 billion and $7.9 billion.
Liquidity
As of Mar 31, 2020, Quanta Services had cash and cash equivalents of $377.2 million compared with $164.8 million at 2019-end. The company’s long-term debt (net of current maturities) amounted to $1,589.3 million, up from $1,292.2 million as of Dec 31, 2019.
Net cash provided by operating activities was $227.5 million in the quarter versus $82.8 million cash used in operating activities in the prior-year period. Free cash flow was $164.4 million in the quarter versus negative free cash flow of $140.5 million a year ago. On Mar 31, 2020, Quanta Services had total liquidity of $1.7 billion.
Updates 2020 Guidance
The company expects revenues in the range of $11.4-$11.8 billion versus prior expectation of 12.2-$12.6 billion.
It expects adjusted earnings between $3.04 and $3.36 per share compared with $3.62-$4.02 expected earlier. Adjusted EBITDA is projected within $860-$925 million versus $1.03-$1.12 billion of prior projection. This indicates a decrease from $941.8 million reported in 2019.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -55.85% due to these changes.
VGM Scores
At this time, Quanta Services has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Quanta Services has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Quanta Services (PWR) Up 27.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Quanta Services (PWR - Free Report) . Shares have added about 27.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Quanta Services due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Quanta Services Q1 Earnings In Line, Revenues Miss
Quanta Services Inc. reported first-quarter 2020 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same.
According to the company, 80-90% of its revenues are derived from utility, communications, and certain pipeline and industrial infrastructure services that will likely continue to be resilient, even in the present challenging environment. It expects to achieve record backlog during the year. Yet, it expects the second quarter to be the most challenging due to short-term disruptions.
Numbers in Detail
In the quarter under review, the company reported adjusted earnings of 47 cents per share that matched the consensus estimate but decreased 51% from the year-ago profit level.
Total revenues of $2.76 billion missed the consensus mark by 0.04% and decreased 1.5% year over year due to lower contribution from its Pipeline and Industrial Infrastructure Services segment.
Segment Details
The company reports results under two reportable segments: Electric Power Infrastructure Services segment (accounting for 63.9% of revenues), and Pipeline and Industrial Infrastructure Services (36.1%).
Revenues from Electric Power Infrastructure Services totaled $1,767 million, increasing 6.2% year over year. However, operating margins contracted 240 bps to 7.3%.
Within the Pipeline and Industrial Infrastructure Services segment, revenues declined 12.8% from the prior-year quarter to $997.1 million. Moreover, operating margins of 3.1% declined 50 bps year over year.
Operating Highlights
Operating margin during the quarter contracted 140 bps from a year ago to 2.9%. Adjusted EBITDA of $162.6 million declined 19.4% from $201.8 million a year ago.
As of Mar 31, 2020, the company reported total backlog of $14.7 billion and 12-month backlog of $7.6 billion. This compares favorably with $12.6 billion of total backlog and $6.9 billion of 12-month backlog a year ago. However, the reported metrics were down from fourth quarter-end respective figures of $15 billion and $7.9 billion.
Liquidity
As of Mar 31, 2020, Quanta Services had cash and cash equivalents of $377.2 million compared with $164.8 million at 2019-end. The company’s long-term debt (net of current maturities) amounted to $1,589.3 million, up from $1,292.2 million as of Dec 31, 2019.
Net cash provided by operating activities was $227.5 million in the quarter versus $82.8 million cash used in operating activities in the prior-year period. Free cash flow was $164.4 million in the quarter versus negative free cash flow of $140.5 million a year ago. On Mar 31, 2020, Quanta Services had total liquidity of $1.7 billion.
Updates 2020 Guidance
The company expects revenues in the range of $11.4-$11.8 billion versus prior expectation of 12.2-$12.6 billion.
It expects adjusted earnings between $3.04 and $3.36 per share compared with $3.62-$4.02 expected earlier. Adjusted EBITDA is projected within $860-$925 million versus $1.03-$1.12 billion of prior projection. This indicates a decrease from $941.8 million reported in 2019.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -55.85% due to these changes.
VGM Scores
At this time, Quanta Services has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Quanta Services has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.