The Zacks Building Products - Heavy Construction industry has been witnessing higher costs, labor woes and supply constraints. Defying these odds, Dycom Industries, Inc. ( DY Quick Quote DY - Free Report) rallied 18.1% in a year against the industry’s 20.2% decline. This Palm Beach Gardens, FL-based specialty contracting service provider has been benefiting from higher demand for network bandwidth and mobile broadband, extended geographic reach, and proficient program management and network planning services. Although persistent impacts of the complexity of a large customer program and higher fuel costs are concerns, the company reported stellar results in first-quarter fiscal 2023 (ended Apr 30, 2022). Quarterly earnings and revenues surpassed the respective Zacks Consensus Estimate by 363.6% and 12.4%. Also, the metrics increased impressively on a year-over-year basis. The upside was mainly backed by solid organic growth and storm restoration services. Image Source: Zacks Investment Research Let’s discuss the factors that are supporting this Zacks Rank #3 (Hold) company’s growth trajectory. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Growth Drivers Prospects in Telecommunication Business: As telecommunications networks face increased demand, customers need to expand the capacity, improve existing networks’ performance and deploy new networks. Several major industry participants are deploying significant wireline networks to offer bandwidth-enabling 1-gigabit speeds using 5G technologies, thereby creating significant opportunities for Dycom. Continuous Contract Flows: The company continues to book new contracts and renew existing ones. Dycom has secured new contracts from AT&T, Comcast, Windstream, Lumen and DISH Network, which will boost the company’s growth momentum. Over the last few years, Dycom has successfully increased the long-term value of its maintenance business, which is expected to complement its deployment of 1-gigabit and wireless-wireline converged networks. Although Dycom’s backlog of $5.593 billion at the first-quarter fiscal 2023-end was down from $6.528 billion a year ago, approximately 53% is expected to be completed in the next 12 months. Backlog activity during the fiscal quarter reflects solid performance as it booked new work and renewed existing work. Dycom expects considerable opportunities across a broad array of customers. Solid Momentum in Engineering & Construction Work: Several large programs have gained momentum in recent times, and many new contracts have commenced meaningful activity, thus propelling Dycom’s growth. Although it expects the upcoming results to be impacted by uncertain economic conditions and cost woes, the business is likely to gain momentum as most of its works are deemed essential for the economy. Encouragingly, wireless construction activity in support of newly available spectrum bands has started and is expected to get a boost this year. Strong Outlook: For the fiscal second quarter (ended Jul 30, 2022), it expects contract revenues to grow in the mid-teens to 20% year over year. The adjusted EBITDA margin is expected to be in line or increase modestly from the year-ago levels. The Zacks Consensus Estimate for fiscal 2023 earnings calls for 116.5% year-over-year growth. The same for revenues indicates 17.1% year-over-year growth. The company currently has a VGM Score of A, which signifies bullish growth prospects. Key Picks Sterling Construction Company, Inc. ( STRL Quick Quote STRL - Free Report) — a Zacks Rank #2 (Buy) company — has been benefiting from broad-based growth across the E-Infrastructure, Building and Transportation solutions segments. The consensus mark for Sterling’s 2022 earnings has remained stable at $2.86 per share over the past 60 days. This suggests 34% year-over-year growth. Granite Construction Inc. ( GVA Quick Quote GVA - Free Report) — a Zacks Rank #2 company — is the largest diversified infrastructure companies in the United States. The company has been banking on strategic initiatives, inorganic moves and strong bidding activity. Earnings estimates for 2022 have increased to $2.11 per share from $1.97 in the past 60 days. Earnings for the current year are expected to climb 17.2% year over year. Primoris Services Corp. ( PRIM Quick Quote PRIM - Free Report) — a Zacks Rank #2 company — is a specialty contractor company operating in the United States and Canada. A robust backlog level of more than $4 billion and solid contract awards in the Energy/Renewables and Utilities segment depict incredible momentum going forward despite supply chain and permitting challenges. Utility-scale solar projects continued to drive the progress of the Energy/Renewables segment. Primoris Services currently carries a Zacks Rank #2. Earnings for 2022 are expected to grow 12%.