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Quanta (PWR) Q1 Earnings Top Estimates, 2023 Revenue View Up
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Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for first-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Notably, earnings beat the consensus mark in the trailing 12 quarters, whereas revenues surpassed the same in nine out of 12 consecutive quarters. The company also raised its full-year revenue expectation.
The company continues to experience high demand for its infrastructure solutions that support energy-transition initiatives and increase reliability, safety and efficiency. Notably, project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
Detailed Discussion
Quanta’s adjusted earnings of $1.24 per share surpassed the consensus estimate of $1.10 by 12.7% but decreased 8.1% from the year-ago quarter’s $1.35.
Total revenues of $4.43 billion also surpassed the consensus mark by 8.4% and increased 11.7% year over year. Solid execution from its Electric Power Infrastructure Solutions segment and better-than-expected profitability from Underground Utility and Infrastructure Solutions segment contributed to double-digit revenue growth.
The operating margin for the quarter contracted 20 basis points (bps) to 2.8% from a year-ago figure. Adjusted EBITDA of $332.4 million declined 3.8% from the year-ago quarter.
The company reported a 12-month backlog of $14.63 billion and a total backlog of $25.27 billion at March 2023-end. This compares favorably with the December 2022-end’s 12-month backlog of $13.79 billion and the total backlog of $24.09 billion. The reported metrics were also up from the year-ago respective figures of $11.50 billion and $20.45 billion.
Quanta Services, Inc. Price, Consensus and EPS Surprise
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 $2.34 billion, increasing 9.2% year over year. The operating margin contracted 30 bps to 9.2%. The segment’s 12-month backlog was $7.57 billion, up from $6.38 billion a year ago. The total backlog of $13.66 billion increased from $12.17 billion reported in the prior-year quarter.
Revenues from Renewable Energy Infrastructure Solutions totaled $1.01 billion, up 15.2% year over year. Operating margins contracted 450 bps to 3.5%. The segment’s 12-month backlog was $4.08 billion, up from $2.38 million a year ago. The total backlog of $5.31 billion increased from $3.08 billion reported in the year-ago period.
Within the Underground Utility and Infrastructure Solutions segment, revenues rose 14% from the prior-year quarter’s levels to $1.08 billion. The operating margin of 5.7% was up 60 bps from the prior-year quarter. Segment’s 12-month backlog totaled $2.98 billion, up from $2.74 billion a year ago. The total backlog increased to $6.31 billion from $5.2 billion in the prior-year quarter.
Liquidity
As of Mar 31, 2023, Quanta had cash and cash equivalents of $217.1 million, down from $428.5 million at 2022-end. The company’s long-term debt (net of current maturities) amounted to $4.08 billion, up from $3.69 billion as of Dec 31, 2022.
Net cash provided by operating activities was $38.4 million in the first quarter, down from $89.1 million a year ago. The free cash flow for the quarter was negative at $31.2 million versus the $15.8 million reported in the year-ago period.
2023 Guidance
Quanta expects revenues between $18.6 billion and $19.1 billion versus prior expectations of $18.4 billion and $18.9 billion. The Zacks Consensus Estimate for the said metric is currently pegged at $18.6 billion.
The company expects adjusted (non-GAAP) earnings between $6.75 and $7.25. The Zacks Consensus Estimate is currently pegged at $7.02 per share.
Adjusted EBITDA is projected within $1.84-$1.95 billion. Quanta’s full-year non-GAAP free cash flow projection is expected to be between $750 million and $1 billion. Quanta expects net cash attributable to operating activities between $1.15 billion and $1.40 billion.
KBR, Inc. (KBR - Free Report) reported strong results in first-quarter 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
KBR’s top and bottom lines gained on strong underlying growth and margin expansion as well as excellent bookings in the reported quarter.
Masco Corporation (MAS - Free Report) reported better-than-expected results for first-quarter 2023. The top and bottom lines surpassed the Zacks Consensus Estimate. The company has been benefiting from strong pricing actions and operational improvements.
On the other hand, adjusted earnings and net sales declined on a year-over-year basis due to supply-chain challenges and inflation headwinds.
United Rentals, Inc. (URI - Free Report) reported first-quarter 2023 results. Its earnings missed the Zacks Consensus Estimate but revenues beat the same. Nonetheless, on a year-over-year basis, URI’s earnings and revenues increased, courtesy of sustained demand in its end markets and the strength of its core rental business.
URI also reaffirmed its 2023 guidance, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility. Also, it unveiled a quarterly dividend of $1.48 per share, with an annualized yield of approximately 0.4%. The company also repurchased $250 million of stock under its existing $1.25 billion share repurchase program.
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Quanta (PWR) Q1 Earnings Top Estimates, 2023 Revenue View Up
Quanta Services Inc. (PWR - Free Report) reported better-than-expected results for first-quarter 2023, wherein adjusted earnings and revenues surpassed the Zacks Consensus Estimate. Notably, earnings beat the consensus mark in the trailing 12 quarters, whereas revenues surpassed the same in nine out of 12 consecutive quarters. The company also raised its full-year revenue expectation.
The company continues to experience high demand for its infrastructure solutions that support energy-transition initiatives and increase reliability, safety and efficiency. Notably, project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
Detailed Discussion
Quanta’s adjusted earnings of $1.24 per share surpassed the consensus estimate of $1.10 by 12.7% but decreased 8.1% from the year-ago quarter’s $1.35.
Total revenues of $4.43 billion also surpassed the consensus mark by 8.4% and increased 11.7% year over year. Solid execution from its Electric Power Infrastructure Solutions segment and better-than-expected profitability from Underground Utility and Infrastructure Solutions segment contributed to double-digit revenue growth.
The operating margin for the quarter contracted 20 basis points (bps) to 2.8% from a year-ago figure. Adjusted EBITDA of $332.4 million declined 3.8% from the year-ago quarter.
The company reported a 12-month backlog of $14.63 billion and a total backlog of $25.27 billion at March 2023-end. This compares favorably with the December 2022-end’s 12-month backlog of $13.79 billion and the total backlog of $24.09 billion. The reported metrics were also up from the year-ago respective figures of $11.50 billion and $20.45 billion.
Quanta Services, Inc. Price, Consensus and EPS Surprise
Quanta Services, Inc. price-consensus-eps-surprise-chart | Quanta Services, Inc. Quote
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 $2.34 billion, increasing 9.2% year over year. The operating margin contracted 30 bps to 9.2%. The segment’s 12-month backlog was $7.57 billion, up from $6.38 billion a year ago. The total backlog of $13.66 billion increased from $12.17 billion reported in the prior-year quarter.
Revenues from Renewable Energy Infrastructure Solutions totaled $1.01 billion, up 15.2% year over year. Operating margins contracted 450 bps to 3.5%. The segment’s 12-month backlog was $4.08 billion, up from $2.38 million a year ago. The total backlog of $5.31 billion increased from $3.08 billion reported in the year-ago period.
Within the Underground Utility and Infrastructure Solutions segment, revenues rose 14% from the prior-year quarter’s levels to $1.08 billion. The operating margin of 5.7% was up 60 bps from the prior-year quarter. Segment’s 12-month backlog totaled $2.98 billion, up from $2.74 billion a year ago. The total backlog increased to $6.31 billion from $5.2 billion in the prior-year quarter.
Liquidity
As of Mar 31, 2023, Quanta had cash and cash equivalents of $217.1 million, down from $428.5 million at 2022-end. The company’s long-term debt (net of current maturities) amounted to $4.08 billion, up from $3.69 billion as of Dec 31, 2022.
Net cash provided by operating activities was $38.4 million in the first quarter, down from $89.1 million a year ago. The free cash flow for the quarter was negative at $31.2 million versus the $15.8 million reported in the year-ago period.
2023 Guidance
Quanta expects revenues between $18.6 billion and $19.1 billion versus prior expectations of $18.4 billion and $18.9 billion. The Zacks Consensus Estimate for the said metric is currently pegged at $18.6 billion.
The company expects adjusted (non-GAAP) earnings between $6.75 and $7.25. The Zacks Consensus Estimate is currently pegged at $7.02 per share.
Adjusted EBITDA is projected within $1.84-$1.95 billion. Quanta’s full-year non-GAAP free cash flow projection is expected to be between $750 million and $1 billion. Quanta expects net cash attributable to operating activities between $1.15 billion and $1.40 billion.
Zacks Rank & Some Recent Construction Releases
Quanta currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
KBR, Inc. (KBR - Free Report) reported strong results in first-quarter 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
KBR’s top and bottom lines gained on strong underlying growth and margin expansion as well as excellent bookings in the reported quarter.
Masco Corporation (MAS - Free Report) reported better-than-expected results for first-quarter 2023. The top and bottom lines surpassed the Zacks Consensus Estimate. The company has been benefiting from strong pricing actions and operational improvements.
On the other hand, adjusted earnings and net sales declined on a year-over-year basis due to supply-chain challenges and inflation headwinds.
United Rentals, Inc. (URI - Free Report) reported first-quarter 2023 results. Its earnings missed the Zacks Consensus Estimate but revenues beat the same. Nonetheless, on a year-over-year basis, URI’s earnings and revenues increased, courtesy of sustained demand in its end markets and the strength of its core rental business.
URI also reaffirmed its 2023 guidance, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility. Also, it unveiled a quarterly dividend of $1.48 per share, with an annualized yield of approximately 0.4%. The company also repurchased $250 million of stock under its existing $1.25 billion share repurchase program.