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Quanta Services' (PWR) Q4 Earnings Beat Estimates, Stock Up
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Quanta Services Inc. (PWR - Free Report) reported impressive results in fourth-quarter 2019. Both the top and bottom lines surpassed the Zacks Consensus Estimate. However, adjusted earnings fell marginally on a year-over-year basis.
Notably, the stock grew nearly 9% in the pre-market trading session on Feb 27, post its earnings release. Better-than-expected results in fourth-quarter 2019 and strong 2020 projections might have boosted investors’ sentiments. Also, the company believes that strategic growth initiatives will help it post impressive results going forward.
Into the Numbers
In the quarter under review, the company reported adjusted earnings of 93 cents per share, beating the consensus estimate of 84 cents by 10.7%. However, the reported figure fell 3.1% from 96 cents per share reported a year ago.
Quanta Services, Inc. Price, Consensus and EPS Surprise
Total revenues of $3.11 billion surpassed the consensus mark of $3.03 billion by 2.6%. In addition, the said metric grew marginally from the prior-year period. Revenue growth in the Electric Power Infrastructure Services segment was offset by softness in the Pipeline and Industrial Infrastructure Services business.
Segment Details
The company reports results under two reportable segments: Electric Power Infrastructure Services segment (accounting for 59.3%), and Pipeline and Industrial Infrastructure Services (40.7%).
Revenues from Electric Power Infrastructure Services totaled $1,847.4 million, increasing 11.3% year over year. However, operating margins contracted 110 basis points (bps) to 8.7%.
Within the Pipeline and Industrial Infrastructure Services segment, revenues declined 12.9% from the prior-year quarter to $1,265.4 million. However, operating margins of 7% improved 330 bps year over year.
Operating Highlights
Operating margin during the quarter contracted 10 bps from a year ago to 4.7%. Adjusted EBITDA of $262.3 million declined 4% from $273.3 million a year ago.
As of Dec 31, 2019, the company reported total backlog of $15 billion and 12-month backlog of $7.9 billion. This compares favorably with $12.3 billion of total backlog and $7 billion of 12-month backlog at 2018-end. Also, the reported metrics were up from third-quarter end respective figures of $13.3 billion and $7.6 billion.
Liquidity
As of Dec 31, 2019, Quanta Services had cash and cash equivalents of $164.8 million compared with $78.7 million at 2018-end. The company’s long-term debt and notes payable (net of current maturities) amounted to $1,292.2 million, up from $1,040.5 million as of Dec 31, 2018.
Net cash used in operating activities was $526.6 million in 2019 versus $358.8 million cash provided by operating activities in the prior year. Free cash flow was $297.9 million in the quarter versus $97.7 million a year ago.
2019 Highlights
In 2019, the company’s adjusted earnings came in at $3.31 per share, increasing 18.5% from the year-ago figure of $2.81 and surpassing analysts’ expectation of $3.25 by 1%. Revenues in the year totaled $12.11 billion, reflecting an increase of 8.4% year over year. Also, the metric surpassed the consensus mark of $12.03 billion by 0.7%.
Notably, the company completed seven acquisitions in 2019.
2020 Guidance
The company expects revenues in the range of $12.2-$12.6 billion versus the Zacks Consensus Estimate of $12.84 billion.
It expects adjusted earnings between $3.62 and $4.02 per share. Considering the mid-point of the range, the expectation is below the consensus mark of $3.92. Adjusted EBITDA is projected within $1.03-$1.12 billion, indicating a significant increase from $941.8 million reported in 2019.
Notably, the company completed a strategic review of its Latin American (LATAM) operations owing to the conditions experienced in Peru during 2019 and political volatility in other countries. In 2020, LATAM operations are expected to generate revenues within $20-$40 million, operating loss in the $15-$20 million range and loss per share in the band of 10-13 cents.
Zacks Rank & Peer Releases
Quanta Services currently carries a Zacks Rank #4 (Sell).
Jacobs Engineering Group Inc. (J - Free Report) reported first-quarter fiscal 2020 (ended Dec 27, 2019) results, wherein earnings met the Zacks Consensus Estimate, while revenues beat the same. The company reaffirmed its adjusted EBITDA guidance for fiscal 2020.
KBR, Inc. (KBR - Free Report) reported strong results in fourth-quarter 2019. The top and bottom lines beat the Zacks Consensus Estimate and improved year over year on continued solid organic growth across the business.
AECOM (ACM - Free Report) reported first-quarter fiscal 2020 results, with earnings and revenues missing the respective Zacks Consensus Estimate. However, earnings increased 27.8% year over year.
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Quanta Services' (PWR) Q4 Earnings Beat Estimates, Stock Up
Quanta Services Inc. (PWR - Free Report) reported impressive results in fourth-quarter 2019. Both the top and bottom lines surpassed the Zacks Consensus Estimate. However, adjusted earnings fell marginally on a year-over-year basis.
Notably, the stock grew nearly 9% in the pre-market trading session on Feb 27, post its earnings release. Better-than-expected results in fourth-quarter 2019 and strong 2020 projections might have boosted investors’ sentiments. Also, the company believes that strategic growth initiatives will help it post impressive results going forward.
Into the Numbers
In the quarter under review, the company reported adjusted earnings of 93 cents per share, beating the consensus estimate of 84 cents by 10.7%. However, the reported figure fell 3.1% from 96 cents per share reported a year ago.
Quanta Services, Inc. Price, Consensus and EPS Surprise
Quanta Services, Inc. price-consensus-eps-surprise-chart | Quanta Services, Inc. Quote
Total revenues of $3.11 billion surpassed the consensus mark of $3.03 billion by 2.6%. In addition, the said metric grew marginally from the prior-year period. Revenue growth in the Electric Power Infrastructure Services segment was offset by softness in the Pipeline and Industrial Infrastructure Services business.
Segment Details
The company reports results under two reportable segments: Electric Power Infrastructure Services segment (accounting for 59.3%), and Pipeline and Industrial Infrastructure Services (40.7%).
Revenues from Electric Power Infrastructure Services totaled $1,847.4 million, increasing 11.3% year over year. However, operating margins contracted 110 basis points (bps) to 8.7%.
Within the Pipeline and Industrial Infrastructure Services segment, revenues declined 12.9% from the prior-year quarter to $1,265.4 million. However, operating margins of 7% improved 330 bps year over year.
Operating Highlights
Operating margin during the quarter contracted 10 bps from a year ago to 4.7%. Adjusted EBITDA of $262.3 million declined 4% from $273.3 million a year ago.
As of Dec 31, 2019, the company reported total backlog of $15 billion and 12-month backlog of $7.9 billion. This compares favorably with $12.3 billion of total backlog and $7 billion of 12-month backlog at 2018-end. Also, the reported metrics were up from third-quarter end respective figures of $13.3 billion and $7.6 billion.
Liquidity
As of Dec 31, 2019, Quanta Services had cash and cash equivalents of $164.8 million compared with $78.7 million at 2018-end. The company’s long-term debt and notes payable (net of current maturities) amounted to $1,292.2 million, up from $1,040.5 million as of Dec 31, 2018.
Net cash used in operating activities was $526.6 million in 2019 versus $358.8 million cash provided by operating activities in the prior year. Free cash flow was $297.9 million in the quarter versus $97.7 million a year ago.
2019 Highlights
In 2019, the company’s adjusted earnings came in at $3.31 per share, increasing 18.5% from the year-ago figure of $2.81 and surpassing analysts’ expectation of $3.25 by 1%. Revenues in the year totaled $12.11 billion, reflecting an increase of 8.4% year over year. Also, the metric surpassed the consensus mark of $12.03 billion by 0.7%.
Notably, the company completed seven acquisitions in 2019.
2020 Guidance
The company expects revenues in the range of $12.2-$12.6 billion versus the Zacks Consensus Estimate of $12.84 billion.
It expects adjusted earnings between $3.62 and $4.02 per share. Considering the mid-point of the range, the expectation is below the consensus mark of $3.92. Adjusted EBITDA is projected within $1.03-$1.12 billion, indicating a significant increase from $941.8 million reported in 2019.
Notably, the company completed a strategic review of its Latin American (LATAM) operations owing to the conditions experienced in Peru during 2019 and political volatility in other countries. In 2020, LATAM operations are expected to generate revenues within $20-$40 million, operating loss in the $15-$20 million range and loss per share in the band of 10-13 cents.
Zacks Rank & Peer Releases
Quanta Services currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Jacobs Engineering Group Inc. (J - Free Report) reported first-quarter fiscal 2020 (ended Dec 27, 2019) results, wherein earnings met the Zacks Consensus Estimate, while revenues beat the same. The company reaffirmed its adjusted EBITDA guidance for fiscal 2020.
KBR, Inc. (KBR - Free Report) reported strong results in fourth-quarter 2019. The top and bottom lines beat the Zacks Consensus Estimate and improved year over year on continued solid organic growth across the business.
AECOM (ACM - Free Report) reported first-quarter fiscal 2020 results, with earnings and revenues missing the respective Zacks Consensus Estimate. However, earnings increased 27.8% year over year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained an impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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