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Dycom (DY) Q2 Earnings & Revenues Top Estimates, Up Y/Y

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Dycom Industries Inc. (DY - Free Report) reported strong results in second-quarter fiscal 2025 (ended Jul 27, 2024). Both the top and the bottom line surpassed their respective Zacks Consensus Estimate.

Contract revenues and earnings increased on a year-over-year basis. The upside was backed by solid organic growth from the top five customers and strong contributions from all other customers.

On Aug 21, the company acquired Black & Veatch’s public carrier wireless telecommunications infrastructure business. This takeover strengthens DY’s customer base and broadens its scope to address growth opportunities in wireless network modernization, including Open RAN transformation initiatives and deployment services.

Earnings & Revenue Discussion

Dycom reported adjusted earnings per share (EPS) of $2.46, beating the Zacks Consensus Estimate of $2.18 by 12.8% and increasing 21.2% from $2.03 year over year.

Contract revenues of $1.20 billion surpassed the consensus mark of $1.19 billion by 0.7% and rose 15.5% year over year. Contract revenues increased 9.2% on an organic basis. Acquisitions contributed $65.9 million to contract revenues.

Dycom Industries, Inc. Price, Consensus and EPS Surprise

 

Dycom Industries, Inc. Price, Consensus and EPS Surprise

Dycom Industries, Inc. price-consensus-eps-surprise-chart | Dycom Industries, Inc. Quote

 

The company’s top five customers contributed 54.9% to total contract revenues, which inched up 7.1%, organically. Revenues from all other customers increased 12.3% organically in the quarter. The period marks the 22nd consecutive period of organic growth for DY’s all other customers in aggregate, excluding the top five.

Dycom’s largest customer, AT&T, contributed 17.5% to total revenues and increased 20.6% organically. Lumen (the second-largest customer) contributed 13.6% to total revenues and inched up 0.7% organically. Comcast contributed 8.8%, Verizon represented 10.1% and Charter added 2.1% to total revenues. The company’s fourth customer contributed to 8% of revenues and surged 73.2% organically.

Fiber construction revenues from electric utilities were $88.7 million.

Operations & Backlog Details

Adjusted EBITDA increased 21.1% to $158.3 million from $130.8 million reported a year ago. Adjusted EBITDA margin of 13.2% expanded 60 basis points from the year-ago level.

Dycom’s backlog at the end of the fiscal second quarter totaled $6.834 billion compared with $6.917 billion at the fiscal 2024 end. Of the backlog, $3.830 billion is projected to be completed in the next 12 months.

Financials

As of Jul 27, 2024, DY had liquidity of $622 million, including cash and cash equivalents worth $19.6 million compared with $101.1 million as of Jan 27, 2024. Long-term debt was $942.4 million at the fiscal second-quarter end, up from $791.4 million at the fiscal 2024 end.

At the end of the fiscal second quarter, DY repurchased 210,000 shares of its common stock for $29.8 million at an average price of $141.84 per share.

Fiscal Third-Quarter View

For the fiscal third quarter (ending on Oct 26, 2024), DY expects contract revenues to grow by mid-to-high single digits year over year. It expects $75 million of acquired contract revenues for the quarter.

The adjusted EBITDA margin is expected to increase 20-50 bps from the year-ago levels. For the said period, Dycom expects the effective tax rate to be 26.5% and diluted shares of 29.6 million. Interest expenses, net, is likely to be $17.5 million and amortization expenses to be $9.5 million.

Zacks Rank & Recent Construction Releases

Dycom currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meritage Homes Corporation (MTH - Free Report) reported impressive second-quarter 2024 results, with earnings and total closing revenues topping the Zacks Consensus Estimate and rising year over year.

MTH’s quarterly results were backed by resilient housing demand and its progress in delivering quick-turning and affordable move-in-ready homes. MTH now expects 14,750-15,500 home closings for the year, up from the prior range of 14,500-15,000. The closings are now likely to generate revenues between $6.1 billion and $6.3 billion, up from the previous expectation of $6-$6.2 billion.

NVR, Inc. (NVR - Free Report) reported mixed second-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and Homebuilding revenues surpassing the same. However, both metrics increased on a year-over-year basis.

The upside was backed by improved demand trends, which resulted in higher settlements. Although the cancelation rate increased during the second quarter, growth in new orders and increased ASP of new orders are encouraging for the company’s prospects. Settlements in the quarter were up 11% year over year to 5,659 units. New orders increased 3% from the prior-year quarter’s level to 6,067 units. On a unit basis, backlog at the end of Jun 30, 2024, improved 3% from the prior-year quarter’s figure to 11,597 homes and 6% on a dollar basis to $5.45 billion.

PulteGroup Inc. (PHM - Free Report) reported stellar results in the second quarter of 2024, with earnings and revenues beating the Zacks Consensus Estimate. On a year-over-year basis, the bottom and the top line increased.

PHM saw significant benefits from key factors that drove its success. The company's balanced operating model resulted in increases in closings, average sales price and gross margin, which collectively led to a 19.3% increase in EPS. Effective management of sales price, pace and starts on a community-by-community basis enabled the company to achieve high returns on invested capital and equity, evidenced by a 27.1% return on equity in the past 12 months.


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