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Dycom's (DY) Q4 Earnings & Revenues Lag Estimates, Stock Up
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Dycom Industries Inc. (DY - Free Report) reported tepid results for fourth-quarter fiscal 2024 (ended Jan 27, 2024). Both the top and bottom lines missed their respective Zacks Consensus Estimate.
Contract revenues increased but earnings declined on a year-over-year basis. Shares of the company gained 3.3% on Feb 28, post the earnings release.
Earnings & Revenue Discussion
Dycom reported adjusted earnings per share (EPS) of 79 cents, missing the Zacks Consensus Estimate of 91 cents by 13.2% and declined from 83 cents by 4.8% year over year.
Dycom Industries, Inc. Price, Consensus and EPS Surprise
Contract revenues of $952.5 million moved up 3.8% year over year but lagged the consensus mark of $971 million by 2%. Contract revenues decreased 2.5% on an organic basis. Acquisitions contributed $57.5 million to contract revenues.
The company’s top five customers contributed 58.6% to total contract revenues, which declined 13% organically. Revenues from all other customers increased 17.8% organically in the quarter. The quarter marks the 20th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer, Lumen, contributed 17.2% to total revenues and rallied 48.9% organically. This marks the eighth consecutive quarter of organic growth with Lumen. AT&T (the second-largest customer) contributed 17.1% to total revenues. Comcast contributed 10.2% and Charter contributed 7.4% of revenues (surged a whopping 124.3% organically). Verizon (the fifth largest customer) represented 6.7% of total revenues.
Fiber construction revenues from electric utilities were $83.7 million.
Operations & Backlog Details
Adjusted EBITDA increased to $93.7 million from $83.1 million reported a year ago. Adjusted EBITDA margin of 9.8% expanded 70 bps from the year-ago level.
Dycom’s backlog at the end of the fiscal fourth quarter totaled $6.917 billion compared with $6.141 billion at fiscal 2023-end. Of the backlog, $3.966 billion is projected to be completed in the next 12 months.
Fiscal 2024 Highlights
The company reported total contract revenues of $4.176 billion, up 9.6% from $3.808 billion at fiscal 2023-end, primarily due to 6.9% organic revenues growth (after adjusting for $102.7 million of contract revenues from an acquired business that was not owned during the prior year).
Adjusted EBITDA margin was 12.1%, up 250 bps from 9.6% in fiscal 2023. Adjusted EPS was $7.37 compared with $4.74 in fiscal 2023.
Financials
As of Jan 27, 2024, Dycom had liquidity of $703.6 million, including cash and cash equivalents worth $101.1 million (compared with $224.2 million on Jan 28, 2023). Long-term debt was $791.4 million at fiscal 2024-end, down from $807.4 million at the end of fiscal 2023.
At the end of fiscal 2024, DY repurchased 260,000 shares of its common stock for $29.4 million at an average price of $112.93 per share.
Fiscal Q1 FY’25 View
For the fiscal first quarter (ending on Apr 27, 2024), DY expects contract revenues to be in line or decline slightly from the first quarter of fiscal 2024 level. It expects $60 million of acquired contract revenues for the quarter.
The adjusted EBITDA margin is expected to increase 25-75 bps from the year-ago levels. For the said period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.5 million. Interest expenses, net, is likely to be $13.2 million and amortization expenses to be $5.5 million.
The company expects organic revenues to grow year over year from the fiscal second quarter.
Capital expenditures, net is anticipated to be in the range of $220-$230 million for fiscal 2025.
Sterling Infrastructure, Inc. (STRL - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. Both the top and the bottom lines increased year over year.
The upside was driven by strong contributions from the Transportation and Building Solutions segments, along with its strategic emphasis on higher margins.
Owens Corning (OC - Free Report) reported better-than-expected results for fourth-quarter 2023. Both earnings and net sales surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
Chair and chief executive officer of OC, Brian Chambers, stated, “Looking ahead, we will continue to focus on delivering outstanding results in the near term as we execute the strategic moves announced last week, which will further strengthen our leadership in building and construction materials and position the company for long-term success.”
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues missed the consensus mark but rose year over year.
In the future, MLM anticipates strong demand for infrastructure, large-scale energy and domestic manufacturing projects. This will largely offset weaker residential demand and the anticipated softening in light non-residential activity. With mortgage rates stabilizing and affordability headwinds receding, MLM fully expects single-family residential construction to recover as demand still exceeds supply, particularly in its key markets.
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Dycom's (DY) Q4 Earnings & Revenues Lag Estimates, Stock Up
Dycom Industries Inc. (DY - Free Report) reported tepid results for fourth-quarter fiscal 2024 (ended Jan 27, 2024). Both the top and bottom lines missed their respective Zacks Consensus Estimate.
Contract revenues increased but earnings declined on a year-over-year basis. Shares of the company gained 3.3% on Feb 28, post the earnings release.
Earnings & Revenue Discussion
Dycom reported adjusted earnings per share (EPS) of 79 cents, missing the Zacks Consensus Estimate of 91 cents by 13.2% and declined from 83 cents by 4.8% year over year.
Dycom Industries, Inc. Price, Consensus and EPS Surprise
Dycom Industries, Inc. price-consensus-eps-surprise-chart | Dycom Industries, Inc. Quote
Contract revenues of $952.5 million moved up 3.8% year over year but lagged the consensus mark of $971 million by 2%. Contract revenues decreased 2.5% on an organic basis. Acquisitions contributed $57.5 million to contract revenues.
The company’s top five customers contributed 58.6% to total contract revenues, which declined 13% organically. Revenues from all other customers increased 17.8% organically in the quarter. The quarter marks the 20th consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.
Dycom’s largest customer, Lumen, contributed 17.2% to total revenues and rallied 48.9% organically. This marks the eighth consecutive quarter of organic growth with Lumen. AT&T (the second-largest customer) contributed 17.1% to total revenues. Comcast contributed 10.2% and Charter contributed 7.4% of revenues (surged a whopping 124.3% organically). Verizon (the fifth largest customer) represented 6.7% of total revenues.
Fiber construction revenues from electric utilities were $83.7 million.
Operations & Backlog Details
Adjusted EBITDA increased to $93.7 million from $83.1 million reported a year ago. Adjusted EBITDA margin of 9.8% expanded 70 bps from the year-ago level.
Dycom’s backlog at the end of the fiscal fourth quarter totaled $6.917 billion compared with $6.141 billion at fiscal 2023-end. Of the backlog, $3.966 billion is projected to be completed in the next 12 months.
Fiscal 2024 Highlights
The company reported total contract revenues of $4.176 billion, up 9.6% from $3.808 billion at fiscal 2023-end, primarily due to 6.9% organic revenues growth (after adjusting for $102.7 million of contract revenues from an acquired business that was not owned during the prior year).
Adjusted EBITDA margin was 12.1%, up 250 bps from 9.6% in fiscal 2023. Adjusted EPS was $7.37 compared with $4.74 in fiscal 2023.
Financials
As of Jan 27, 2024, Dycom had liquidity of $703.6 million, including cash and cash equivalents worth $101.1 million (compared with $224.2 million on Jan 28, 2023). Long-term debt was $791.4 million at fiscal 2024-end, down from $807.4 million at the end of fiscal 2023.
At the end of fiscal 2024, DY repurchased 260,000 shares of its common stock for $29.4 million at an average price of $112.93 per share.
Fiscal Q1 FY’25 View
For the fiscal first quarter (ending on Apr 27, 2024), DY expects contract revenues to be in line or decline slightly from the first quarter of fiscal 2024 level. It expects $60 million of acquired contract revenues for the quarter.
The adjusted EBITDA margin is expected to increase 25-75 bps from the year-ago levels. For the said period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.5 million. Interest expenses, net, is likely to be $13.2 million and amortization expenses to be $5.5 million.
The company expects organic revenues to grow year over year from the fiscal second quarter.
Capital expenditures, net is anticipated to be in the range of $220-$230 million for fiscal 2025.
Zacks Rank & 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.
Sterling Infrastructure, Inc. (STRL - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. Both the top and the bottom lines increased year over year.
The upside was driven by strong contributions from the Transportation and Building Solutions segments, along with its strategic emphasis on higher margins.
Owens Corning (OC - Free Report) reported better-than-expected results for fourth-quarter 2023. Both earnings and net sales surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
Chair and chief executive officer of OC, Brian Chambers, stated, “Looking ahead, we will continue to focus on delivering outstanding results in the near term as we execute the strategic moves announced last week, which will further strengthen our leadership in building and construction materials and position the company for long-term success.”
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues missed the consensus mark but rose year over year.
In the future, MLM anticipates strong demand for infrastructure, large-scale energy and domestic manufacturing projects. This will largely offset weaker residential demand and the anticipated softening in light non-residential activity. With mortgage rates stabilizing and affordability headwinds receding, MLM fully expects single-family residential construction to recover as demand still exceeds supply, particularly in its key markets.