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Why Quanta (PWR) is Poised to Beat Q4 Earnings Estimates

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Quanta Services, Inc. (PWR - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 24, before the opening bell.

In the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by 0.7% and grew 5.7% year over year. Total revenues missed the consensus mark by 2.2% but increased 10.9% year over year.

Encouragingly, earnings topped analysts’ expectations in 10 of the trailing 11 quarters.

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings has remained stable over the past 60 days at $1.41 per share. The said figure indicates a 15.6% increase from the year-ago earnings of $1.22 per share. The consensus mark for revenues is $3.68 billion, suggesting a 26.5% year-over-year rise.

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 Services’ fourth-quarter revenues are expected to have increased owing to higher contribution from both the segments — Electric Power Infrastructure Services and Underground Utility and Infrastructure Solutions.

The Electric Power Infrastructure Services segment is likely to have benefited from broad-based business strength driven by ongoing grid modernization, system hardening, renewable energy interconnections and solid execution. Also, contributions from larger transmission projects underway in Canada and revenues from the acquired businesses are likely to have supported bottom-line growth in the to-be-reported quarter. Also, higher profitability from the LUMA joint venture and other integral unconsolidated affiliates along with communications and electric operations might have added to the positives.

The Zacks Consensus Estimate for the Electric Power segment’s revenues is pegged at $2,227 million, implying 5.7% growth from a year ago.

The Underground Utility and Infrastructure Solutions segment has been benefiting from higher demand for gas utility and pipeline integrity services and pent-up demand for the services that were deferred due to the effects of COVID-19 on the downstream market.

During the third-quarter 2021 earnings call, the company slightly moderated its view for the segment, primarily due to softness in industrial operations. The consensus estimate for the Underground Utility segment’s revenues is pegged at $1,000 million, indicating growth of 24% from $806.4 million reported in the year-ago period.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Quanta Services this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of 0.00%.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Another Stock Worth a Look

Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #1.

In the trailing four quarters, Boise Cascade’s earnings topped the consensus mark in each of the trailing four quarters, with the average being 45.5%. According to our model, BCC has the right combination of elements to post an earnings beat for the quarter to be reported.

Peer Releases

Jacobs Engineering Group Inc. (J - Free Report) reported first-quarter fiscal 2021 (ended Dec 31, 2021) results, wherein earnings and revenues missed the respective Zacks Consensus Estimate.

Meanwhile, on Feb 7, Jacobs announced the acquisition of mobility analytics leader StreetLight. This buyout reflects another data-rich software platform addition to its portfolio, which is expected to provide highly profitable long-term recurring revenue growth opportunities.

AECOM (ACM - Free Report) reported mixed first-quarter fiscal 2022 results, with earnings surpassing the Zacks Consensus Estimate but revenues missing the same.

Gaurav Kapoor, AECOM’s chief financial officer, stated, “We are compounding our earnings at a high rate, built on a plan for accelerating organic NSR growth, the strong underlying profitability of the business, and our intent to continue to return cash flow to our shareholders. This confidence is reflected in our increased EPS guidance for this year.”

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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