Pike Q3 Earnings Lag Ests, Up Y/Y - Analyst Blog

Energy solutions provider Pike Corporation PIKE reported lower-than-expected results for the fiscal third quarter 2014 (ended Mar 31, 2014). Earnings were 9 cents per share, up 12.5% year over year. The bottom-line result, however, lagged the Zacks Consensus Estimate of 11 cents.

Revenue

Pike generated revenues of $207.6 million, reflecting an increase of 3.7% year over year and marginally surpassing the Zacks Consensus Estimate of $205 million. The year-over-year improvement was primarily due to higher revenues from storm-related services and core services in the Engineering segment, offset partially by fall in core revenues generated in the Construction segment.

Revenues from the Construction segment inched up 1.2% year over year to $168.7 million. The Engineering segment recorded a 15.2% year-over-year increase in revenues that came in at $38.9 million.

Costs/Margins

Pike's cost of operations increased 3.5% year over year and represented 87.4% of total revenue, down from 87.5% in the year-ago quarter. Gross margin increased 10 basis points (bps) to 12.6%. General and administrative expenses, as a percentage of total revenue, was stable at 9.3%

Balance Sheet/Cash Flow

Exiting the fiscal third quarter 2014, Pike Corporation had cash and cash equivalents of $3.8 million versus $2.4 million in the preceding quarter. The revolving credit facility increased 7.7% sequentially to $237.5 million.
 
Outlook

Pike Corporation sees solid growth opportunities in its engineering business in the quarters ahead.
 
Pike Corporation currently has a $289.3 million market capitalization and carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the industry include Black Hills Corporation BKH, Brookfield Infrastructure Partners L.P. BIP and Calpine Corp. CPN, all of which carry a Zacks Rank #1 (Strong Buy).