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Quanta (PWR) to Report Q4 Earnings: Electric Power Holds Key

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Quanta Services, Inc. (PWR - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 25, before the opening bell.

In the last reported quarter, the company’s earnings and revenues beat the respective Zacks Consensus Estimate by 26.1% and 0.2%. On a year-over-year basis, its earnings grew 22.8% but revenues dropped 9.9%.

Quanta’s earnings topped the consensus mark in all the last four quarters, with the average being 22.8%.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings for the quarter to be reported has been unchanged at 98 cents per share over the past 30 days. The figure indicates a 5.4% increase from the year-ago earnings of 93 cents per share. However, the consensus mark for revenues is $2.91 billion, suggesting 6.6% year-over-year drop.

Quanta Services, Inc. Price and EPS Surprise

Quanta Services, Inc. Price and EPS Surprise

Quanta Services, Inc. price-eps-surprise | Quanta Services, Inc. Quote

Factors to Note

Quanta’s fourth-quarter revenues are expected to have been hit by lower contribution from the Pipeline and Industrial segment, given challenges in the broader energy market. Overall energy markets have been facing challenges due to the COVID-19 outbreak. Customers have been restricting onsite activity for the company’s other services. Also, they have been deferring maintenance and certain turnaround projects to the latter part of this year. Results from its Pipeline and Industrial Infrastructure Services segment (contributing 30.2% to third-quarter revenues) are likely to reflect the effects of COVID-related restrictions. The consensus estimate for the segment’s revenues is pegged at $839 million, implying a decrease of 33.7% from the year-ago period.

Meanwhile, robust spending by electric utilities on grid modernization and infrastructure hardening — particularly in the western United States — as well as by gas utilities on distribution system modernization and safety programs is likely to have benefited the Electric Power segment (contributing 69.8% to third-quarter revenues). Also, throughout its service territories, it actively pursued billions of dollars of larger electric transmission projects with minimal disruption.

The Zacks Consensus Estimate for the segment’s revenues is pegged at $2,060 million, implying 13.2% growth from a year ago.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Quanta this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

TopBuild Corp. (BLD - Free Report) has an Earnings ESP of +6.66% and holds a Zacks Rank #2.

Masonite International Corporation (DOOR - Free Report) has an Earnings ESP of +2.09% and a Zacks Rank #2.

Floor & Decor Holdings, Inc. (FND - Free Report) has an Earnings ESP of +9.02% and carries a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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