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Dycom (DY) Shares Tumble More Than 24% on Slashed Guidance
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Dycom Industries Inc.’s (DY - Free Report) shares slumped more than 24% on Monday, after the specialty contracting service provider slashed its fiscal second-quarter, as well as full-year earnings and revenue outlook.
Trimmed Views
Given weaker-than-expected business so far this year, Dycom now expects adjusted earnings (excluding non-recurring items) for second-quarter fiscal 2019 in the range of $1.05-$1.08 per share. The current expectation is considerably lower than the company’s earlier guided range of $1.13-$1.28 per share.
Contract revenues are now estimated at $799.5 million (versus $830-$860 million projected earlier). Meanwhile, adjusted EBITDA, as a percentage of contract revenues, is anticipated in the range of 12-12.2% (versus 12.4-12.8% anticipated earlier).
For fiscal 2019 as well, the company lowered its adjusted earnings guidance to the range of $2.62-$3.07 per share from prior expectation of $4.26-$5.15 per share. The company now expects its contract revenues in the range of $3.01-$3.11 billion compared with $3.23-$3.43 billion expected earlier. Adjusted EBITDA, as a percentage of contract revenues, is expected in the range of 10.7-11.1% (versus 12.4-12.9% projected earlier).
Dycom also provided views for the third quarter of fiscal 2019 (ending Oct 27, 2018). The company expects contract revenues in the range of $785-835 million. Adjusted earnings will likely be between 80 cents and $1.04 per share and adjusted EBITDA (as a percentage of contract revenues) is expected in the range of 11.6-12.2%.
Although the company lowered its views given the near-term trends, it remains hopeful about its backlog growth as well as significant industry opportunities.
The industry is witnessing a dramatically increasing network bandwidth, with major industry participants deploying significant 1 gigabit wireline networks. Also, emerging wireless technologies necessitate incremental wireline deployments. Such positive industry trends are generating unprecedented opportunities for Dycom. These factors bode well for this Zacks Rank #3 (Hold) company’s growth.
EMCOR, Primoris and D.R. Horton’s current-year earnings are expected to grow 15%, 34.8% and 41.6%, respectively.
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Dycom (DY) Shares Tumble More Than 24% on Slashed Guidance
Dycom Industries Inc.’s (DY - Free Report) shares slumped more than 24% on Monday, after the specialty contracting service provider slashed its fiscal second-quarter, as well as full-year earnings and revenue outlook.
Trimmed Views
Given weaker-than-expected business so far this year, Dycom now expects adjusted earnings (excluding non-recurring items) for second-quarter fiscal 2019 in the range of $1.05-$1.08 per share. The current expectation is considerably lower than the company’s earlier guided range of $1.13-$1.28 per share.
Contract revenues are now estimated at $799.5 million (versus $830-$860 million projected earlier). Meanwhile, adjusted EBITDA, as a percentage of contract revenues, is anticipated in the range of 12-12.2% (versus 12.4-12.8% anticipated earlier).
For fiscal 2019 as well, the company lowered its adjusted earnings guidance to the range of $2.62-$3.07 per share from prior expectation of $4.26-$5.15 per share. The company now expects its contract revenues in the range of $3.01-$3.11 billion compared with $3.23-$3.43 billion expected earlier. Adjusted EBITDA, as a percentage of contract revenues, is expected in the range of 10.7-11.1% (versus 12.4-12.9% projected earlier).
Dycom Industries, Inc. Price
Dycom Industries, Inc. Price | Dycom Industries, Inc. Quote
Fiscal Third-Quarter Guidance
Dycom also provided views for the third quarter of fiscal 2019 (ending Oct 27, 2018). The company expects contract revenues in the range of $785-835 million. Adjusted earnings will likely be between 80 cents and $1.04 per share and adjusted EBITDA (as a percentage of contract revenues) is expected in the range of 11.6-12.2%.
Although the company lowered its views given the near-term trends, it remains hopeful about its backlog growth as well as significant industry opportunities.
The industry is witnessing a dramatically increasing network bandwidth, with major industry participants deploying significant 1 gigabit wireline networks. Also, emerging wireless technologies necessitate incremental wireline deployments. Such positive industry trends are generating unprecedented opportunities for Dycom. These factors bode well for this Zacks Rank #3 (Hold) company’s growth.
Stocks to Consider
Some better-ranked stocks in the industry include EMCOR Group, Inc. (EME - Free Report) , Primoris Services Corporation (PRIM - Free Report) and D.R. Horton, Inc. (DHI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EMCOR, Primoris and D.R. Horton’s current-year earnings are expected to grow 15%, 34.8% and 41.6%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>