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Pike Misses Q1 Earnings, Lags Revenues

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Energy solutions provider Pike Electric Corporation reported disappointing year-over-year results for first quarter fiscal 2014. Pike’s earnings per share came in at 3 cents, falling 88.5% year over year, due to a decline in sales and margins. Additionally, Pike missed the Zacks Consensus Estimate of 13 cents by 76.9%.

Revenues: A drop in storm-related services reduced revenues in the quarter by 21.0% to $193.3 million. Revenues also lagged the Zacks Consensus Estimate of $214.0 million.

Revenues from the Construction segment fell 22.6% year over year to $157.5 million. Revenues derived from the All Other Operations segment declined 13.0% year over year to $35.8 million. The decrease in revenues was primarily due to lowered core sales and storm-related services.

Costs/Margins: Gross profit margin for Pike in the quarter was 10.3%, a decrease of 480 basis points year over year. The decline in gross margin was driven by reduced revenues, increased investments in Western U.S. as well as loss of business in California. General and administrative (G&A) expenses totaled $17.4 million, declining from $19.5 million recorded in the year-ago quarter.

Balance Sheet/Cash Flow: Exiting the first quarter of fiscal 2014, Pike’s cash and cash equivalents stood at $2.9 million, compared with $2.6 million in the preceding quarter. Revolving credit facility was recorded at $220.0 million this quarter, declining from $221.0 million at the end of fiscal fourth quarter of 2013.

The company incurred capital expenditure of $12.2 million in the quarter, compared with $8.1 million in the first quarter of fiscal 2013.

Outlook: Pike expects to witness a year-over-year rise in core sales over the coming quarters. However, revenues from storm related activities are anticipated to remain weak.

Other Stocks to Consider

Pike currently carries a Zacks Rank #4 (Sell). Other stocks worth considering in the industry include NRG Yield, Inc. (NYLD - Free Report) , Tractebel Energia S.A. and UNS Energy Corporation . All these carry a Zacks Rank #1 (Strong Buy).




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