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Stantec (STN) Stock Rises 2% Following Q4 Earnings Beat
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Stantec Inc. (STN - Free Report) reported mixed fourth-quarter 2022 results with earnings beating the Zacks Consensus Estimate but revenues falling short of the same.
The stock gained 2% since the earnings release on Feb 22 in response to the better-than-expected earnings performance.
Adjusted earnings (excluding 11 cents from non-recurring items) came in at 60 cents, beating the Zacks Consensus mark by 13.2%. Adjusted earnings increased 33.3% from the year-ago figure.
Total revenues of $832.7 million slightly missed the consensus estimate and decreased 11.5% on a year-over-year basis. The top line includes 10.6% organic growth and 9.8% growth from acquisitions.
Stantec’s shares have gained 17.6% in the past year compared with its industry’s 9.5% decline.
Quarter Details
The project margin came in at $620.5 million indicating a 22.5% increase from the year-ago figure. Project margin, as a percentage of net revenues, for the quarter came in at 54.9% as compared to 55.3% a year ago. The increase is supported by net revenue growth and solid project execution.
Adjusted EBITDA grew 34.9% to $191.7 million on a year-over-year basis. The adjusted EBITDA margin was at 17%, 150 basis points more than the previous year figure.
The backlog reduced to $5.9 billion from $6.2 billion reported at the end of the previous quarter. The figure marks an increase of 14.9% from the Dec 31 2022 figure.
Balance Sheet & Cash Flow
Stantec generated $209.6 million in cash from operating activities in the quarter. The free cash flow generated by the company in the current quarter is $135.10 million. Capital expenditures were $28.6 million. During the reported quarter, the company paid $19.9 million through dividends.
The company has generated an adjusted return on invested capital of 10.5%in line, 20 basis points more than the year-ago reported quarter.
2023 outlook
The company expects the net revenues to go up 7-11% in the year as compared to 2022.
Adjusted EBITDA margins are expected to stay in the band of 16-17%. The company targets to generate a return on invested capital of more than 10.5%.
Stantec's Board of Directors declared a dividend of $0.195 per share, payable on April 17, 2023, to shareholders of record on March 31, 2023, representing an 8.3% increase.
The following stocks from the Business Service sector reported better-than-expected fourth-quarter results.
Gartner, Inc. (IT - Free Report) ,currently having a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat the Zacks Consensus Estimate by 44% and increased 23.8% year over year. IT’s revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.6% and improved 15.2% year over year on a reported basis and 20% on a foreign-currency-neutral basis.
Aptiv PLC (APTV - Free Report) , currently carrying a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results. Adjusted earnings (excluding 41 cents from non-recurring items) of $1.27 per share beat the Zacks Consensus Estimate by 6.7% and increased more than 100% on a year-over-year basis. APTV’s revenue surpassed the Zacks Consensus Estimate by 6% and increased 12.2% year over year.
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Stantec (STN) Stock Rises 2% Following Q4 Earnings Beat
Stantec Inc. (STN - Free Report) reported mixed fourth-quarter 2022 results with earnings beating the Zacks Consensus Estimate but revenues falling short of the same.
The stock gained 2% since the earnings release on Feb 22 in response to the better-than-expected earnings performance.
Adjusted earnings (excluding 11 cents from non-recurring items) came in at 60 cents, beating the Zacks Consensus mark by 13.2%. Adjusted earnings increased 33.3% from the year-ago figure.
Total revenues of $832.7 million slightly missed the consensus estimate and decreased 11.5% on a year-over-year basis. The top line includes 10.6% organic growth and 9.8% growth from acquisitions.
Stantec Inc. Price, Consensus and EPS Surprise
Stantec Inc. price-consensus-eps-surprise-chart | Stantec Inc. Quote
Stantec’s shares have gained 17.6% in the past year compared with its industry’s 9.5% decline.
Quarter Details
The project margin came in at $620.5 million indicating a 22.5% increase from the year-ago figure. Project margin, as a percentage of net revenues, for the quarter came in at 54.9% as compared to 55.3% a year ago. The increase is supported by net revenue growth and solid project execution.
Adjusted EBITDA grew 34.9% to $191.7 million on a year-over-year basis. The adjusted EBITDA margin was at 17%, 150 basis points more than the previous year figure.
The backlog reduced to $5.9 billion from $6.2 billion reported at the end of the previous quarter. The figure marks an increase of 14.9% from the Dec 31 2022 figure.
Balance Sheet & Cash Flow
Stantec generated $209.6 million in cash from operating activities in the quarter. The free cash flow generated by the company in the current quarter is $135.10 million. Capital expenditures were $28.6 million. During the reported quarter, the company paid $19.9 million through dividends.
The company has generated an adjusted return on invested capital of 10.5%in line, 20 basis points more than the year-ago reported quarter.
2023 outlook
The company expects the net revenues to go up 7-11% in the year as compared to 2022.
Adjusted EBITDA margins are expected to stay in the band of 16-17%. The company targets to generate a return on invested capital of more than 10.5%.
Stantec's Board of Directors declared a dividend of $0.195 per share, payable on April 17, 2023, to shareholders of record on March 31, 2023, representing an 8.3% increase.
Stantec currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The following stocks from the Business Service sector reported better-than-expected fourth-quarter results.
Gartner, Inc. (IT - Free Report) ,currently having a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat the Zacks Consensus Estimate by 44% and increased 23.8% year over year. IT’s revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.6% and improved 15.2% year over year on a reported basis and 20% on a foreign-currency-neutral basis.
Aptiv PLC (APTV - Free Report) , currently carrying a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results. Adjusted earnings (excluding 41 cents from non-recurring items) of $1.27 per share beat the Zacks Consensus Estimate by 6.7% and increased more than 100% on a year-over-year basis. APTV’s revenue surpassed the Zacks Consensus Estimate by 6% and increased 12.2% year over year.