Quanta Beats Estimate

Zacks

Quanta Services Inc. (PWR) released its first-quarter 2012 results before the opening bell today, reporting earnings per share of 22 cents, above the Zacks Consensus Estimate of 16 cents and prior-year loss per share of 8 cents.

Total Revenue

Total revenue for the quarter was $1.43 billion compared with $849.0 million in the prior-year quarter, up 68%. The electric power segment was the major contributor. During the quarter, the company executed a number electric transmission projects.

Segment Details

Electric Power revenue in the quarter was $933.3 million, up 64.7% from $566.5 million in the prior-year period. Natural Gas and Pipeline revenue came in at $358.9 million, up 103% from $176.8 million, Telecommunications revenue was $106 million, up 33.5% from $79.4 million and Fiber Optic Licensing revenue was $27 million, up 2.7% from $26.3 million.

Segment wise, total Backlog came in at $4.97 billion, $1.41 billion, $545.6.6 million and $441.2 million in Electric Power, Natural Gas and Pipeline, Telecommunications and Fiber Optic Licensing segment, respectively.

Income and Expenses

Operating income in the quarter was $79.5 million compared with a loss of $29.9 million in the prior-year quarter. SG&A expense was $106.6 million compared with $91.5 million in the comparable quarter last year.

Segment operating income was $109.3 million, $8.4 million and $13.6 million in Electric Power, Telecommunications and Fiber Optic Licensing segment, respectively. Natural Gas and Pipeline segment reported an operating loss of $11 million.

Balance Sheet and Cash Flow

Cash and cash equivalents at the end of the quarter were $177.4 million with shareholders equity of $3.47 billion.

Outlook

The company expects to report improved results as it moves ahead. In second-quarter 2012, Quanta expects revenues to be in the range of $1.4 billion to $1.5 billion and diluted earnings per share is expected to be in the range of 28 cents to 30 cents. Adjusted diluted earnings per share (non-GAAP earnings) are expected to be 33 cents to 35 cents for the second quarter of 2012.

For full-year 2012, the company expects revenue to be in the range of $5.4 billion to $5.7 billion and diluted earnings per share to be in the range of $1.00 to $1.20. Adjusted diluted earnings per share (non-GAAP earnings) are expected to be $1.19 to $1.39 for 2012.

Quanta Services Inc. (Quanta) is a leading national provider of specialty contracting services, and is one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry. Effective during the quarter ended Sep 30, 2009, Quanta began reporting its results under four reportable segments: (1) Electric Power Infrastructure Services, (2) Natural Gas and Pipeline Infrastructure Services, (3) Telecommunications Infrastructure Services and (4) Fiber Optic Licensing.

We continue to maintain a Neutral rating on Quanta Services, with a Zacks #2 Rank (Buy recommendation) over the next one-to-three months.

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