Back to top

Analyst Blog

Leading specialty contracting services provider, Dycom Industries Inc. (DY - Analyst Report) reported second-quarter (ended Jan 26) fiscal 2014 net loss of $3.1 million or 9 cents per share, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company had reported a net income of $5.2 million or 15 cents per share.

Following the earnings release, the stock price gained 4.3% on Feb 26 to close at $27.44.

Dycom’s performance has been impacted by severe weather conditions in the latter half of second-quarter 2014. Moreover, heavy snowfall and the exceptionally cold temperature resulted in lower number of available workdays, which weighed on both productivity and margins.

Revenues

Dycom’s contract revenues increased 5.7% year over year to $390.5 million while there was a growth of 0.9% organically. However, revenues fell short of the Zacks Consensus Estimate of $395 million.

Despite the headwinds, Dycom’s revenues benefited mainly from its strong portfolio of customers, primarily in the telecom and wireless equipment industry. In the quarter, approximately 59.5% of the company’s revenues came from its top five clients.

Income and Expenses

The company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $28.2 million, down from with $37.2 million in the prior-year quarter.

The company’s general and administration expenses were $38.6 million versus $38.8 million in the prior-year quarter.

Balance Sheet and Cash Flow

Cash and cash equivalents decreased to $16.3 million at the quarter-end from $18.6 million at the end of Jul 27, 2013. However, the figure marked an increase from $14.4 million in the last quarter. The company reported total equity of $451.6 million, compared with $428.4 million at the end of the Jul 27, 2013. The company’s long-term debt increased to $416.3 million from the previous year’s figure of $444.2 million.

Outlook

Along with the earnings release, management provided guidance for the third quarter of fiscal 2014. Revenues for third-quarter fiscal 2014 are expected to be in the $415.0–$435.0 million range and earnings per share are projected at 19–26 cents.

Zacks Rank

Dycom currently carries a Zacks Rank #3 (Hold).

Performance of Other Stocks in the Same Sector

Chicago Bridge & Iron Co. N.V. (CBI - Analyst Report) posted fourth-quarter adjusted earnings of $230.0 million or $1.91 per share, which easily beat the Zacks Consensus Estimate of $1.17 per share.

Quanta Services Inc. (PWR - Analyst Report) reported fourth-quarter 2013 non-GAAP earnings of 50 cents per share, beating the Zacks Consensus Estimate by 22%.

Fluor Corporation's (FLR - Analyst Report) fourth-quarter 2013 net earnings of $167 million or $1.01 per share surpassed the Zacks Consensus Estimate of 98 cents by 3.1%.

Please login to Zacks.com or register to post a comment.