Quanta Services Tops Q3 Earnings, Revenues Up 60% Y/Y - Analyst Blog

Quanta Services Inc. (PWR) reported third-quarter 2014 adjusted earnings of 61 cents a share, beating the Zacks Consensus Estimate of 55 cents a share by 2.4%. Earnings also improved 7.6% from the prior-year quarter figure of 46 cents. However, the company's GAAP earnings per share remained flat year over year at 43 cents.

The company benefited from its leading position in the energy infrastructure market. This apart, increased customer spending and a diligent operational execution were the other positives. In the quarter, the company won several significant awards including the high voltage electric transmission contract from Nalcor Energy.

Revenues

Total revenue in the quarter came in at $2,171.1 million, up a robust 60.2% from $1645.1 million in the prior-year quarter. Revenues surpassed the Zacks Consensus Estimate of $2,049 million.

Quanta Services' Electric Power segment revenues in the quarter were $1,379.2 million, an increase of 9.7% year over year. The Oil and Gas Infrastructure segment reported revenues of $749.8 million, reflecting a 17.3% year-over-year increase while the Fiber Optic Licensing revenues declined 5% year over year to $42.1 million.

Income and Expenses

Operating income in the quarter was $142.9 million compared with $141.1 million in the prior-year quarter, reflecting an increase of 1.3%. Selling, general and administrative expenses (SG&A) totaled $148 million as against $124.9 million in the comparable last-year quarter.

Other Financial Details

Quanta Services ended the quarter with cash and cash equivalents of $144.2 million, shareholders' equity of $4.5 billion and long-term debt of $83.2 million.

Outlook

Encouraged by the impressive third-quarter performance, the company provided guidance for the fourth quarter of 2014.

Quanta expects fourth-quarter revenues in the range of $1.95 –$2.05 billion and adjusted earnings per share in the band of 50–52 cents. The company anticipates the amortization of intangibles to be about $9.5 million while non-cash stock-based compensation expense is projected to be approximately $7.8 million for fourth-quarter 2014.

Zacks Rank

Quanta currently has a Zacks Rank #2 (Buy). Some other similarly-ranked stocks in the sector include Pernix Group Inc (PRXG), CUI Global, Inc. (CUI) and AO Smith Corp. (AOS).

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