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Dycom's (DY) Stock Down Despite Q3 Earnings & Revenue Beat
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Dycom Industries Inc. (DY - Free Report) reported solid results for third-quarter fiscal 2023 (ended Oct 29, 2022). The top and bottom lines surpassed their respective Zacks Consensus Estimate and increased on a year-over-year basis. The upside was mainly backed by solid organic growth of the top five customers.
Shares of DY lost 2.3% on Nov 21, post-earnings release.
Earnings & Revenue Discussion
Dycom’s adjusted earnings of $1.69 per share (after adjusting for income tax benefits of 11 cents per share) surpassed the Zacks Consensus Estimate of $1.28 by 32% and increased 77.9% from the year-ago adjusted figure of 95 cents. The uptrend was driven by higher adjusted EBITDA, lower depreciation and amortization, and higher gains on asset sales, partially offset by higher stock-based compensation and interest expense.
Contract revenues of $1,042.4 million increased 22.1% year over year and topped the consensus mark of $974 million by 7%. Organically, contract revenues increased 22.1%.
The company’s top five customers represented 66.5% of total contract revenues, which rose 27.4% organically. Revenues from all other customers increased 13.3% organically in the quarter. The quarter marks the 15th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer AT&T (contributing 24.8% to total revenues), advanced 29.4% on an organic basis. This marked its seventh consecutive quarter of organic growth. Lumen (the second-largest customer) contributed 13.7% to total revenues, Comcast contributed 10.4%, while Verizon and Frontier represented 9.1% and 8.5% of total revenues, respectively. Lumen and Frontier rose 64.5% and 115.4% organically, respectively.
Fiber construction revenues from electric utilities increased 53.6% year over year, organically, and contributed 7.9% to total contract revenues in the quarter.
Dycom’s backlog at the end of the fiscal third quarter totaled $6.116 billion compared with $5.896 billion at the third quarter of fiscal 2022-end. Of the backlog, $3.276 billion is projected to be completed in the next 12 months.
Dycom Industries, Inc. Price, Consensus and EPS Surprise
Depreciation and amortization expenses of $35.5 million were down 6.1% year over year. General and administrative expenses of $78.8 million increased 17.8% year over year.
Adjusted EBITDA was $114.6 million during the quarter, up 37.9% year over year. Adjusted EBITDA margin of 11% expanded 130 bps from the year-ago level.
Financials
As of Oct 29, 2022, Dycom had liquidity of $444.3 million, including cash and cash equivalents worth $65.3 million compared with $310.8 million on Jan 29, 2022. Long-term debt was $811.4 million at the end of third-quarter fiscal 2023, down from $823.3 million at the fiscal 2022-end.
Fiscal Q4 Guidance
For the fiscal fourth quarter (ending Jan 28, 2023), management expects contract revenues to grow in mid-to-high-single digits from the year-ago reported figure. The adjusted EBITDA margin is expected to increase modestly from the year-ago levels. For the period, Dycom expects the effective tax rate to be 27% and diluted shares of 30.1 million. Interest expense is likely to be $11.8 million.
Jacobs Engineering Group Inc. (J - Free Report) reported fourth-quarter fiscal 2022 (ended Sep 30, 2022) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year.
For fiscal 2022, Jacobs’ total revenues of $14.92 billion grew 5.9% year over year and 10% at constant currency. Adjusted EPS was $6.93, an increase of 10% from fiscal 2022 and 13% at constant currency. Adjusted EBITDA grew 10% to $1.4 billion and 12% at constant currency.
AECOM (ACM - Free Report) reported impressive fourth-quarter fiscal 2022 results. Its earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. The company’s strong performance was backed by accelerating organic growth, strong profitability and disciplined capital allocation.
For fiscal 2023, ACM anticipates generating 8% organic NSR growth (4% for actual NSR), underpinned by robust momentum in the Professional Services business. The company expects adjusted EPS in the range of $3.55-$3.75. This indicates a 10% improvement from fiscal 2022 levels at a constant-currency basis, considering the mid-point of the guidance.
KBR, Inc. (KBR - Free Report) reported mixed third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Nonetheless, the increasing global importance of national security, energy security, energy transition and climate change have been acting as major tailwinds for KBR.
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Dycom's (DY) Stock Down Despite Q3 Earnings & Revenue Beat
Dycom Industries Inc. (DY - Free Report) reported solid results for third-quarter fiscal 2023 (ended Oct 29, 2022). The top and bottom lines surpassed their respective Zacks Consensus Estimate and increased on a year-over-year basis. The upside was mainly backed by solid organic growth of the top five customers.
Shares of DY lost 2.3% on Nov 21, post-earnings release.
Earnings & Revenue Discussion
Dycom’s adjusted earnings of $1.69 per share (after adjusting for income tax benefits of 11 cents per share) surpassed the Zacks Consensus Estimate of $1.28 by 32% and increased 77.9% from the year-ago adjusted figure of 95 cents. The uptrend was driven by higher adjusted EBITDA, lower depreciation and amortization, and higher gains on asset sales, partially offset by higher stock-based compensation and interest expense.
Contract revenues of $1,042.4 million increased 22.1% year over year and topped the consensus mark of $974 million by 7%. Organically, contract revenues increased 22.1%.
The company’s top five customers represented 66.5% of total contract revenues, which rose 27.4% organically. Revenues from all other customers increased 13.3% organically in the quarter. The quarter marks the 15th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer AT&T (contributing 24.8% to total revenues), advanced 29.4% on an organic basis. This marked its seventh consecutive quarter of organic growth. Lumen (the second-largest customer) contributed 13.7% to total revenues, Comcast contributed 10.4%, while Verizon and Frontier represented 9.1% and 8.5% of total revenues, respectively. Lumen and Frontier rose 64.5% and 115.4% organically, respectively.
Fiber construction revenues from electric utilities increased 53.6% year over year, organically, and contributed 7.9% to total contract revenues in the quarter.
Dycom’s backlog at the end of the fiscal third quarter totaled $6.116 billion compared with $5.896 billion at the third quarter of fiscal 2022-end. Of the backlog, $3.276 billion is projected to be completed in the next 12 months.
Dycom Industries, Inc. Price, Consensus and EPS Surprise
Dycom Industries, Inc. price-consensus-eps-surprise-chart | Dycom Industries, Inc. Quote
Operating Highlights
Depreciation and amortization expenses of $35.5 million were down 6.1% year over year. General and administrative expenses of $78.8 million increased 17.8% year over year.
Adjusted EBITDA was $114.6 million during the quarter, up 37.9% year over year. Adjusted EBITDA margin of 11% expanded 130 bps from the year-ago level.
Financials
As of Oct 29, 2022, Dycom had liquidity of $444.3 million, including cash and cash equivalents worth $65.3 million compared with $310.8 million on Jan 29, 2022. Long-term debt was $811.4 million at the end of third-quarter fiscal 2023, down from $823.3 million at the fiscal 2022-end.
Fiscal Q4 Guidance
For the fiscal fourth quarter (ending Jan 28, 2023), management expects contract revenues to grow in mid-to-high-single digits from the year-ago reported figure. The adjusted EBITDA margin is expected to increase modestly from the year-ago levels. For the period, Dycom expects the effective tax rate to be 27% and diluted shares of 30.1 million. Interest expense is likely to be $11.8 million.
Zacks Rank & Few Recent Construction Releases
Dycom currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Jacobs Engineering Group Inc. (J - Free Report) reported fourth-quarter fiscal 2022 (ended Sep 30, 2022) results, with earnings and revenues surpassing their respective Zacks Consensus Estimate and rising year over year.
For fiscal 2022, Jacobs’ total revenues of $14.92 billion grew 5.9% year over year and 10% at constant currency. Adjusted EPS was $6.93, an increase of 10% from fiscal 2022 and 13% at constant currency. Adjusted EBITDA grew 10% to $1.4 billion and 12% at constant currency.
AECOM (ACM - Free Report) reported impressive fourth-quarter fiscal 2022 results. Its earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. The company’s strong performance was backed by accelerating organic growth, strong profitability and disciplined capital allocation.
For fiscal 2023, ACM anticipates generating 8% organic NSR growth (4% for actual NSR), underpinned by robust momentum in the Professional Services business. The company expects adjusted EPS in the range of $3.55-$3.75. This indicates a 10% improvement from fiscal 2022 levels at a constant-currency basis, considering the mid-point of the guidance.
KBR, Inc. (KBR - Free Report) reported mixed third-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Nonetheless, the increasing global importance of national security, energy security, energy transition and climate change have been acting as major tailwinds for KBR.