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VSE (VSEC) Q4 Earnings Outpace Estimates, Revenues Miss
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VSE Corporation (VSEC - Free Report) reported mixed fourth-quarter 2023 results, wherein its earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines increased year over year.
The quarterly results reflect strong contributions from the Aviation and Fleet segments. The uptrend was backed by strong program execution, expansion of the distribution product lines and repair capabilities, along with contributions from recent acquisitions. Also, growth trends in commercial sales and robust contributions from legacy customers bode well.
Looking forward to 2024, VSEC expects to leverage on the new investments in newly awarded contracts, and the integration and launch of the recently acquired businesses. Also, the lately announced acquisition of Turbine Controls, Inc. is expected to add to the uptrend.
Inside the Headlines
VSE reported adjusted earnings per share (EPS) of 85 cents, which surpassed the consensus estimate of 76 cents by 11.8%. In the year-ago quarter, the company reported EPS of 68 cents.
Quarterly revenues of $235.3 million missed the consensus mark of $235.6 million by 0.1%. However, the reported figure increased 36.8% from the year-ago level of $172 million.
Operating margin of 10.8% was up 150 basis points (bps) from 9.3% in the year-ago quarter. Adjusted EBITDA for the reported period increased 45.7% from the prior-year period to $31.4 million.
Segmental Discussion
Aviation: This segment’s revenues increased 43.4% year over year to $153.7 million in the fourth quarter. Operating income increased 52.3% to $18.8 million from $12.3 million in the year-ago period. Adjusted EBITDA for the quarter grew 51.9% year over year to $23.9 million. The uptrend was driven by strong execution of distribution programs, maintenance, repair and overhaul market share gains, improved pricing and product mix, increased operating leverage and contributions from the Desser Aerospace acquisition.
Fleet: Revenues from this segment increased 25.9% year over year to $81.6 million. Operating income increased 59.5% year over year to $9 million. Adjusted EBITDA for the quarter grew 24.1% year over year to $9.8 million. The uptick was attributable to favorable customer and product mix.
Financial Details
As of Dec 31, 2023, cash and unused commitment availability under its $350 million revolving credit facility maturing in 2026 totaled $216 million compared with $160 million at the end of 2022. Total net debt was $422 million as of 2023 end, up from $286 million at the end of 2022. Net cash used in operations was $21.8 million for 2023 against net cash from operation of $8.1 million for 2022.
2023 Highlights
For the year, VSE reported revenues of $860.5 million, up 28.5% from the 2022 level. Adjusted EPS of $3.31 increased 44.5% from $2.29 a year ago.
Operating margin of 10.2% expanded 200 bps year over year. Adjusted EBITDA of $113.8 million was up 45.5% from the 2022 level of $78.2 million.
2024 Guidance
For 2024, the company expects the Aviation segment’s revenues to grow between 24% and 28% year over year. Adjusted EBITDA margin is expected to be between 15% and 16%.
For the year, revenues in the Fleet segment are expected to grow 13-17% year over year. Adjusted EBITDA is expected to increase 8-12% from the prior-year level.
MasTec, Inc. (MTZ - Free Report) reported impressive results in fourth-quarter 2023, with both earnings and revenues beating their respective Zacks Consensus Estimate. Earnings declined on a year-over-year basis, but revenues increased on the back of strong contributions from the Oil and Gas segment.
MTZ's fourth-quarter results aligned with its expectations, following a challenging 2023. The company is poised to capitalize on the opportunities and aims to achieve record levels of revenues and adjusted EBITDA in 2024. The robust demand for MTZ's services suggests the potential for double-digit revenues and earnings growth in 2025 and beyond.
Dycom Industries Inc. (DY - Free Report) reported tepid results for fourth-quarter fiscal 2024 (ended Jan 27, 2024), wherein both the top and bottom lines missed their respective Zacks Consensus Estimate.
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. For the fiscal first quarter, DY expects contract revenues to be in line or decline slightly from the first quarter of fiscal 2024 level.
TopBuild Corp. (BLD - Free Report) reported impressive results for fourth-quarter 2023. Its earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year.
The 2023 performance of the company demonstrates a consistent enhancement and profitable expansion, notably in the commercial and industrial sectors. These sectors experienced 4.9% growth in the fourth quarter and 6.2% improvement throughout 2023. President and CEO Robert Buck conveyed contentment regarding the company's adeptness in enhancing operational efficiencies and elevating sales and labor productivity. These efforts significantly bolstered revenue growth and margin expansion.
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VSE (VSEC) Q4 Earnings Outpace Estimates, Revenues Miss
VSE Corporation (VSEC - Free Report) reported mixed fourth-quarter 2023 results, wherein its earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines increased year over year.
The quarterly results reflect strong contributions from the Aviation and Fleet segments. The uptrend was backed by strong program execution, expansion of the distribution product lines and repair capabilities, along with contributions from recent acquisitions. Also, growth trends in commercial sales and robust contributions from legacy customers bode well.
Looking forward to 2024, VSEC expects to leverage on the new investments in newly awarded contracts, and the integration and launch of the recently acquired businesses. Also, the lately announced acquisition of Turbine Controls, Inc. is expected to add to the uptrend.
Inside the Headlines
VSE reported adjusted earnings per share (EPS) of 85 cents, which surpassed the consensus estimate of 76 cents by 11.8%. In the year-ago quarter, the company reported EPS of 68 cents.
VSE Corporation Price, Consensus and EPS Surprise
VSE Corporation price-consensus-eps-surprise-chart | VSE Corporation Quote
Quarterly revenues of $235.3 million missed the consensus mark of $235.6 million by 0.1%. However, the reported figure increased 36.8% from the year-ago level of $172 million.
Operating margin of 10.8% was up 150 basis points (bps) from 9.3% in the year-ago quarter. Adjusted EBITDA for the reported period increased 45.7% from the prior-year period to $31.4 million.
Segmental Discussion
Aviation: This segment’s revenues increased 43.4% year over year to $153.7 million in the fourth quarter. Operating income increased 52.3% to $18.8 million from $12.3 million in the year-ago period. Adjusted EBITDA for the quarter grew 51.9% year over year to $23.9 million. The uptrend was driven by strong execution of distribution programs, maintenance, repair and overhaul market share gains, improved pricing and product mix, increased operating leverage and contributions from the Desser Aerospace acquisition.
Fleet: Revenues from this segment increased 25.9% year over year to $81.6 million. Operating income increased 59.5% year over year to $9 million. Adjusted EBITDA for the quarter grew 24.1% year over year to $9.8 million. The uptick was attributable to favorable customer and product mix.
Financial Details
As of Dec 31, 2023, cash and unused commitment availability under its $350 million revolving credit facility maturing in 2026 totaled $216 million compared with $160 million at the end of 2022. Total net debt was $422 million as of 2023 end, up from $286 million at the end of 2022. Net cash used in operations was $21.8 million for 2023 against net cash from operation of $8.1 million for 2022.
2023 Highlights
For the year, VSE reported revenues of $860.5 million, up 28.5% from the 2022 level. Adjusted EPS of $3.31 increased 44.5% from $2.29 a year ago.
Operating margin of 10.2% expanded 200 bps year over year. Adjusted EBITDA of $113.8 million was up 45.5% from the 2022 level of $78.2 million.
2024 Guidance
For 2024, the company expects the Aviation segment’s revenues to grow between 24% and 28% year over year. Adjusted EBITDA margin is expected to be between 15% and 16%.
For the year, revenues in the Fleet segment are expected to grow 13-17% year over year. Adjusted EBITDA is expected to increase 8-12% from the prior-year level.
Zacks Rank & Recent Construction Releases
VSE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MasTec, Inc. (MTZ - Free Report) reported impressive results in fourth-quarter 2023, with both earnings and revenues beating their respective Zacks Consensus Estimate. Earnings declined on a year-over-year basis, but revenues increased on the back of strong contributions from the Oil and Gas segment.
MTZ's fourth-quarter results aligned with its expectations, following a challenging 2023. The company is poised to capitalize on the opportunities and aims to achieve record levels of revenues and adjusted EBITDA in 2024. The robust demand for MTZ's services suggests the potential for double-digit revenues and earnings growth in 2025 and beyond.
Dycom Industries Inc. (DY - Free Report) reported tepid results for fourth-quarter fiscal 2024 (ended Jan 27, 2024), wherein both the top and bottom lines missed their respective Zacks Consensus Estimate.
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. For the fiscal first quarter, DY expects contract revenues to be in line or decline slightly from the first quarter of fiscal 2024 level.
TopBuild Corp. (BLD - Free Report) reported impressive results for fourth-quarter 2023. Its earnings and revenues surpassed the Zacks Consensus Estimate and improved year over year.
The 2023 performance of the company demonstrates a consistent enhancement and profitable expansion, notably in the commercial and industrial sectors. These sectors experienced 4.9% growth in the fourth quarter and 6.2% improvement throughout 2023. President and CEO Robert Buck conveyed contentment regarding the company's adeptness in enhancing operational efficiencies and elevating sales and labor productivity. These efforts significantly bolstered revenue growth and margin expansion.