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Dycom (DY) to Report Q1 Earnings: What's in the Offing?

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Dycom Industries, Inc. (DY - Free Report) is scheduled to report first-quarter fiscal 2023 results on May 25, before the opening bell.

In the last reported quarter, its earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year. The upside was mainly backed by solid organic growth and storm restoration services.

This specialty contracting services provider surpassed earnings estimates in two of the trailing four quarters and missed on another occasion.

Earnings & Revenue Expectations

The Zacks Consensus Estimate for Dycom’s fiscal first-quarter earnings has remained stable at 11 cents in the past 60 days. The estimated figure indicates a whopping 375% increase on a year-over-year basis. The consensus estimate for revenues is pegged at $779.43 million, indicating a 7.1% year-over-year rise.

Dycom Industries, Inc. Price and EPS Surprise

 

Dycom Industries, Inc. Price and EPS Surprise

Dycom Industries, Inc. price-eps-surprise | Dycom Industries, Inc. Quote

Factors to Note

Dycom’s quarterly revenues and earnings are expected to have increased in the fiscal first quarter. The company has been witnessing increased demand for network bandwidth and mobile broadband. Impressive intension fiber-to-the-home deployments from six of its top 10 customers are encouraging. Moreover, it continues to book new contracts and renew existing ones on the back of strong customer relationships

Yet, persistent impacts of the complexity of a large customer program, revenue challenges from other large customers and higher fuel costs are likely to have put pressure on the results in the to-be-reported quarter. Dycom and other industry players like EMCOR Group, Inc. (EME - Free Report) , North American Construction Group Ltd. (NOA - Free Report) and Sterling Construction Company, Inc. (STRL - Free Report) are facing automotive and equipment supply chain challenges.

For the fiscal first quarter, DY expects contract revenues to grow in mid-to-high single digit year over year. The adjusted EBITDA margin is expected to increase modestly from the year-ago levels.

The Zacks Consensus Estimate for its fiscal first-quarter revenues in the Telecommunications segment is pegged at $665 million, indicating a rise from the year-ago quarter’s figure of $639.7 million. The same for the Underground Facility unit is pegged at $75 million, suggesting an improvement from the year-ago quarter’s figure of $65 million. The consensus mark for Electrical and gas utilities and other business revenues is at $33.8 million, calling for an increase from $22.8 million a year ago.

The Zacks Consensus Estimate for the fiscal first-quarter backlog is pegged at $5.802 billion, indicating a surge from $6.528 billion reported in the year-ago period.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Dycom this time around. The 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. This is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

A Brief About Above Mentioned Stocks

EMCOR is benefiting from solid execution in the U.S. Construction segment — comprising the U.S. Mechanical and Electrical Construction units — and disciplined cost control amid the COVID-19 pandemic. Also, accretive buyouts are strengthening its overall results by adding new markets, opportunities and capabilities.

EMCOR currently carries a Zacks Rank #3. Earnings for 2022 are expected to increase by 7.5%.

North American Construction is benefiting from an increased equipment fleet at the Fort Hills mine and stronger demand for mine support work and equipment rental support at the Kearl mine. Also, the completion of three haul truck rebuilds by an external maintenance program and the acquisition of the Australian component supplier DGI are helping the company drive growth. Strong operational execution and enough liquidity are adding to the bliss.

Currently, North American Construction carries a Zacks Rank #3. Earnings for 2022 are expected to rise 11.6%.

Sterling is currently reaping benefits from the transformed business portfolio and overall project mix toward higher value, lower risk, and more profitable work. The Specialty Services segment has been bolstered by the recent buyout of Plateau. The Residential segment is gaining strength from the faster-than-anticipated recovery of the Texas housing market and its expansion into the Houston market. Meanwhile, the company’s Heavy Civil business has been executing well on substantial, heavy highway work. Its diverse portfolio of end customers and geographies, coupled with the strength of end-markets served, has been driving growth despite headwinds from inflation and the supply chain.

Sterling currently carries a Zacks Rank #2. Earnings for 2022 are expected to rise 34%.