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Dycom's (DY) Stock Up as Q1 Earnings & Revenues Top Estimates

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Dycom Industries Inc. (DY - Free Report) reported strong results for first-quarter fiscal 2025 (ended Apr 27, 2024). Both the top and bottom lines surpassed their respective Zacks Consensus Estimate.

Contract revenues and earnings increased on a year-over-year basis. Shares of the company gained nearly 9% in the pre-market trading session on May 22.

Notably, in May, the company acquired a telecommunications construction contractor that will expand its geographic footprint in Alaska.

Earnings & Revenue Discussion

Dycom reported adjusted earnings per share (EPS) of $2.12, which beat the Zacks Consensus Estimate of $1.39 by 52.5% and increased 22.5% from $1.73 year over year.

Contract revenues of $1.14 million surpassed the consensus mark of $1.09 million by 4.8% and grew 9.3% year over year. Contract revenues rose 2.5% on an organic basis. Acquisitions contributed $71.2 million to contract revenues.

Dycom Industries, Inc. Price, Consensus and EPS Surprise

Dycom Industries, Inc. Price, Consensus and EPS Surprise

Dycom Industries, Inc. price-consensus-eps-surprise-chart | Dycom Industries, Inc. Quote

The company’s top five customers contributed 56.4% to total contract revenues, which inched up marginally, organically. Revenues from all other customers increased 5.7% organically in the quarter. The quarter marks the 21st consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.

Dycom’s largest customer, AT&T, contributed 21.5% to total revenues. Lumen (the second-largest customer) contributed 13% to total revenues and rallied 15% organically. Comcast contributed 11.5%, Verizon represented 9.6% and Charter added 2.1% to total revenues. Charter was up 121.8% year over year on an organic basis.

Fiber construction revenues from electric utilities were $96 million.

Operations & Backlog Details

Adjusted EBITDA increased 15.3% to $130.9 million from $113.5 million reported a year ago. Adjusted EBITDA margin of 11.5% expanded 60 basis points from the year-ago level.

Dycom’s backlog at the end of the fiscal first quarter totaled $6.364 billion compared with $6.917 billion at the fiscal 2024-end. Of the backlog, $3.863 billion is projected to be completed in the next 12 months.

Financials

As of Apr 27, 2024, Dycom had liquidity of $573.6 million, including cash and cash equivalents worth $26.1 million compared with $101.1 million as of Jan 27, 2024. Long-term debt was $842.4 million at the fiscal first-quarter end, up from $791.4 million at the fiscal 2024-end.

At the end of the fiscal first quarter, DY repurchased 210,000 shares of its common stock for $29.8 million at an average price of $141.84 per share.

Fiscal Second-Quarter View

For the fiscal second quarter (ending on Jul 27, 2024), DY expects contract revenues to grow by high-single digits year over year. It expects $70 million of acquired contract revenues for the quarter.

The adjusted EBITDA margin is expected to increase 25-75 bps from the year-ago levels. For the said period, Dycom expects the effective tax rate to be 26.5% and diluted shares of 29.4 million. Interest expenses, net, is likely to be $14.9 million and amortization expenses to be $6 million.

Zacks Rank & Peer Releases

Dycom currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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