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Primoris Services Corporation’s (PRIM - Free Report) fourth-quarter 2016 earnings increased 17% year over year to 28 cents per share but fell short of the Zacks Consensus Estimate of 33 cents.
Cost of sales increased 23% to $533 million from $433 million in the year-ago quarter. Gross profit improved 8% year over year to $68.6 million. Gross margin contracted 140 basis points (bps) year over year to 11.4%.
Selling, general and administrative expenses went down 3% year over year to $40 million. Operating profit improved 26% to $28.9 million from $22.9 million in the prior-year quarter. Consequently, operating margin expanded 20 bps year over year to 4.8%.
Primoris Services Corporation Price, Consensus and EPS Surprise
West Construction Services: Net sales soared 70% to $388 million from $229 million in the year-ago quarter. Gross profit improved 50% to $57.8 million from $38.5 million in the year-ago quarter.
East Construction Services: Sales declined 18% year over year to $123 million. The segment reported a gross loss of $0.6 million compared with the prior-year quarter’s gross loss of $8.9 million.
Energy: Net sales dipped 24% year over year to $90 million. Further, gross profit declined 30% to $11.5 million from the year-ago quarter.
Financial Update
Primoris had cash and cash equivalents of $135.8 million at the end of 2016 compared with $161 million as of 2015-end. The company generated cash flow from operations of $62.6 million in 2016, compared with $48.4 million in 2015.
Long-term debt, excluding the current portion, was $203.4 million as of Dec 31, 2016, compared with $220 million as of Dec 31, 2015.
On Feb 21, 2017, the Board of Directors declared 5.5 cents per share dividend to stockholders of record on Mar 31, 2017, payable on or about Apr 15, 2017. Further, the Board authorized a share repurchase program of $5 million with an expiration date of Dec 31, 2017.
2016 Performance
Primoris posted earnings of 51 cents per share for 2016, which decreased 28% year over year. Earnings missed the Zacks Consensus Estimate of 72 cents per share. Revenues for the full year increased 4% to $1.997 billion from $1.929 billion in 2015. Revenues beat the Zacks Consensus Estimate of $1.912 billion.
In the past six months, Primoris has outperformed the Zacks categorized Building and Construction Products - Miscellaneous sub industry. The company’s shares gained around 31% during this period, compared with roughly 5.7% increase recorded by the industry.
The pipeline market is likely to remain strong in the near term, driven by large diameter natural gas pipelines for utility customers. The company continues to grow Master Service Agreement (MSA) work with new utility customers in new geographies. Large industrial infrastructure and mid-size LNG peak shaving projects are on the rise, driven by the continued low cost and dependability of natural gas. These projects will also provide growth opportunities for the Civil group. Primoris' unique ability to offer services across a diverse range of end-markets gives it a competitive edge. Positive momentum within its end markets positions it well for improved results in 2017.
Dallas, TX-based Primoris is a specialty contractor and infrastructure company that serves diverse-end markets. The company also provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater as well as engineering services to major public utilities, petrochemical companies, energy companies, municipalities and other customers.
Primoris currently carries a Zacks Rank #3 (Hold).
Owens Corning has an an average positive earnings surprise of 35.13% in the trailing four quarters. PulteGroup has an average earnings surprise of 13.49% in the last four quarters, while Louisiana-Pacific has an average earnings surprise of 66.28% in the same time frame.
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Primoris Services (PRIM) Q4 Earnings Miss, Revenues Beat
Primoris Services Corporation’s (PRIM - Free Report) fourth-quarter 2016 earnings increased 17% year over year to 28 cents per share but fell short of the Zacks Consensus Estimate of 33 cents.
Cost of sales increased 23% to $533 million from $433 million in the year-ago quarter. Gross profit improved 8% year over year to $68.6 million. Gross margin contracted 140 basis points (bps) year over year to 11.4%.
Selling, general and administrative expenses went down 3% year over year to $40 million. Operating profit improved 26% to $28.9 million from $22.9 million in the prior-year quarter. Consequently, operating margin expanded 20 bps year over year to 4.8%.
Primoris Services Corporation Price, Consensus and EPS Surprise
Primoris Services Corporation Price, Consensus and EPS Surprise | Primoris Services Corporation Quote
Segment Performance
West Construction Services: Net sales soared 70% to $388 million from $229 million in the year-ago quarter. Gross profit improved 50% to $57.8 million from $38.5 million in the year-ago quarter.
East Construction Services: Sales declined 18% year over year to $123 million. The segment reported a gross loss of $0.6 million compared with the prior-year quarter’s gross loss of $8.9 million.
Energy: Net sales dipped 24% year over year to $90 million. Further, gross profit declined 30% to $11.5 million from the year-ago quarter.
Financial Update
Primoris had cash and cash equivalents of $135.8 million at the end of 2016 compared with $161 million as of 2015-end. The company generated cash flow from operations of $62.6 million in 2016, compared with $48.4 million in 2015.
Long-term debt, excluding the current portion, was $203.4 million as of Dec 31, 2016, compared with $220 million as of Dec 31, 2015.
On Feb 21, 2017, the Board of Directors declared 5.5 cents per share dividend to stockholders of record on Mar 31, 2017, payable on or about Apr 15, 2017. Further, the Board authorized a share repurchase program of $5 million with an expiration date of Dec 31, 2017.
2016 Performance
Primoris posted earnings of 51 cents per share for 2016, which decreased 28% year over year. Earnings missed the Zacks Consensus Estimate of 72 cents per share. Revenues for the full year increased 4% to $1.997 billion from $1.929 billion in 2015. Revenues beat the Zacks Consensus Estimate of $1.912 billion.
In the past six months, Primoris has outperformed the Zacks categorized Building and Construction Products - Miscellaneous sub industry. The company’s shares gained around 31% during this period, compared with roughly 5.7% increase recorded by the industry.
The pipeline market is likely to remain strong in the near term, driven by large diameter natural gas pipelines for utility customers. The company continues to grow Master Service Agreement (MSA) work with new utility customers in new geographies. Large industrial infrastructure and mid-size LNG peak shaving projects are on the rise, driven by the continued low cost and dependability of natural gas. These projects will also provide growth opportunities for the Civil group. Primoris' unique ability to offer services across a diverse range of end-markets gives it a competitive edge. Positive momentum within its end markets positions it well for improved results in 2017.
Dallas, TX-based Primoris is a specialty contractor and infrastructure company that serves diverse-end markets. The company also provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater as well as engineering services to major public utilities, petrochemical companies, energy companies, municipalities and other customers.
Primoris currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the construction sector include Owens Corning (OC - Free Report) , PulteGroup, Inc. (PHM - Free Report) and Louisiana-Pacific Corporation (LPX - Free Report) . All of the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Owens Corning has an an average positive earnings surprise of 35.13% in the trailing four quarters. PulteGroup has an average earnings surprise of 13.49% in the last four quarters, while Louisiana-Pacific has an average earnings surprise of 66.28% in the same time frame.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>