Back to top

Image: Bigstock

Quanta (PWR) Q4 Earnings & Revenues Beat Estimates, Stock Up

Read MoreHide Full Article

Quanta Services Inc. (PWR - Free Report) has reported impressive results for fourth-quarter 2022. Adjusted earnings and revenues surpassed the Zacks Consensus Estimate and increased impressively on a year-over-year basis, reflecting the benefits of portfolio strategy and strategic capital deployment.

Notably, the company's earnings beat the consensus mark in the trailing 11 quarters, whereas revenues surpassed the same in eight of the 11 consecutive quarters.

The stock jumped 4.5% on Feb 23 post its earnings release.

Looking forward, Duke Austin, president and CEO of Quanta, stated, "Our 2023 expectations reflect the opportunity for continued growth in revenues, adjusted EBITDA, adjusted earnings per share and cash flow. Further, we are increasingly excited and confident about the opportunity to drive multi-year revenue and double-digit earnings per share growth. As evidenced by our record backlog and the other recent highlights we announced this morning, demand is strong for our infrastructure solutions that support our customers' energy-transition initiatives and increase reliability, safety, efficiency and connectivity through modernization.”

Quanta Services, Inc. Price, Consensus and EPS Surprise

 

Quanta Services, Inc. Price, Consensus and EPS Surprise

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

Detailed Discussion

Quanta’s adjusted earnings of $1.68 per share surpassed the consensus estimate of $1.61 by 4.4% and increased 9.1% from the year-ago quarter’s $1.54. The upside was backed by revenue growth across the segments, a record total backlog, and solid and safe project execution.
 
Total revenues of $4.42 billion surpassed the consensus mark by 3.4% and increased 12.6% year over year.

The operating margin for the quarter expanded 230 basis points (bps) to 5.9% from a year-ago figure. Adjusted EBITDA of $449.9 million improved 15.1% from the year-ago quarter.

The company reported a 12-month backlog of $13.79 billion and a total backlog of $24.09 billion at 2022-end. At December 2021-end, the 12-month backlog came in at $11.31 billion, and the total backlog was $19.27 billion. The reported metrics were also up from third-quarter 2022 end figures of $12.43 billion and $20.87 billion, respective.

Segment Details

Quanta reports results under three reportable segments — Electric Power Infrastructure Solutions segment, Renewable Energy Infrastructure Solutions, and Underground Utility and Infrastructure Solutions.

Revenues from Electric Power Infrastructure Solutions totaled $2.32 billion, increasing 8.6% year over year. The operating margin contracted 30 bps to 11.5%. The segment’s 12-month backlog was $7.54 billion, up from $6.49 billion a year ago. The total backlog of $13.08 billion increased from $12.22 billion reported in the prior-year quarter.

Revenues from Renewable Energy Infrastructure Solutions totaled $999.9 million, up 28.6% year over year. Operating margins contracted 270 bps to 6.4%. The segment’s 12-month backlog was $3.24 billion, up from $2.24 million a year ago. The total backlog of $4.72 billion increased from $2.55 billion reported in the year-ago period.

Within the Underground Utility and Infrastructure Solutions segment, revenues rose 8.6% from the prior-year quarter’s levels to $1.1 billion. The operating margin of 7.1% was up 220 bps from the prior-year quarter. Segment’s 12-month backlog totaled $3.01 billion, up from $2.57 billion a year ago. The total backlog increased to $6.29 billion from $4.51 billion in the prior-year quarter.

Liquidity

As of Dec 31, 2022, Quanta had cash and cash equivalents of $428.5 million, up from $229.1 million at 2021-end. The company’s long-term debt (net of current maturities) amounted to $3.69 billion, down from $3.72 billion as of Dec 31, 2021.

Net cash provided by operating activities was $583.1 million in the fourth quarter, up from $250 million a year ago. The free cash flow for the fourth quarter was $513.5 million versus the $111.2 million reported in the year-ago period.

In 2022, net cash from operating activities was $1.13 billion, up from $582.4 million. Free cash flow was $766.8 million, up from $246.3 million.

2023 Guidance

Quanta expects revenues between $18.4 billion and $18.9 billion. The Zacks Consensus Estimate for the said metric is pegged at $18.14 billion.

The company expects adjusted (non-GAAP) earnings between $6.75 and $7.25. The Zacks Consensus Estimate is pegged at $6.75 per share.

Adjusted EBITDA is projected within $1.82-$1.94 billion. Quanta’s full-year non-GAAP free cash flow projection is expected between $750 million and $1 billion. Quanta expects net cash attributable to operating activities between $1.15 billion and $1.40 billion.

Zacks Rank & Recent Construction Releases

Quanta currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gibraltar Industries, Inc. (ROCK - Free Report) reported impressive earnings in the fourth quarter of 2022. The company's earnings not only surpassed the Zacks Consensus Estimate but also increased on a year-over-year basis.

ROCK reported adjusted earnings of 72 cents per share, which topped the Zacks Consensus Estimate of 71 cents by 1.4% and increased 28.6% year over year from 56 cents. This was driven by strong contributions from the Renewables and Infrastructure segments, backed by material cost alignment, field operations efficiency, price management, business mix, 80/20 initiatives and the share repurchase program.

KBR, Inc. (KBR - Free Report) reported mixed fourth-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.

The increasing global importance of national security, energy security, energy transition and climate change have been acting as major tailwinds for KBR.

AECOM (ACM - Free Report) reported better-than-expected results for first-quarter fiscal 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

On a year-over-year basis, ACM’s bottom line declined despite top-line growth. The company’s strong top-line performance was backed by strong organic NSR growth.

Published in