Quanta Services Inc. Earnings: Beats the Street on Profit Rise

The Cheat Sheet

S&P 500 component Quanta Services Inc. reported net income above Wall Street’s expectations for the fourth quarter. Quanta Services provides infrastructure and contracting solutions to the electric power, natural gas, oil, and telecommunications industries.

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Quanta Services Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the general contractors company rose to $66.3 million (32 cents per share) vs. $33.7 million (16 cents per share) in the same quarter a year earlier. This marks a rise of 97% from the year-earlier quarter.

Revenue: Rose 36.8% to $1.51 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Quanta Services Inc. reported adjusted net income of 41 cents per share. By that measure, the company beat the mean estimate of 34 cents per share. It beat the average revenue estimate of $1.4 billion.

Quoting Management: “For the fourth quarter, revenue increased 37 percent, diluted earnings per share doubled and adjusted diluted earnings per share increased 78 percent, as compared to the same quarter last year, despite a difficult quarter in our natural gas and pipeline segment,” said Jim O’Neil, president and chief executive officer of Quanta Services. “Most of the strength of our business is being driven by increasing transmission project activity in our electric power segment and growth in our telecom segment. We are also encouraged by the opportunities beginning to develop for our natural gas and pipeline segment in 2012. Considering the momentum our business is experiencing and our record backlog, we are optimistic about our outlook for 2012 and beyond.”

Key Stats:

Revenue has increased for four consecutive quarters. Revenue increased 3.7% to $1.25 billion in the third quarter. The figure rose 16.1% in the second quarter from the year earlier and climbed 13.5% in the first quarter from the year-ago quarter.

For three consecutive quarters, the company has topped analyst estimates. It beat the mark by 4 cents in the third quarter and by 2 cents in the second quarter.

Gross margins grew to 15.4% last quarter, a one percentage points difference from the year-earlier quarter. This snaps a streak of two consecutive quarters of shrinking margins.

Looking Forward: The average estimate for the first quarter of the next fiscal year remains unchanged at 16 cents a share. For the fiscal year, the average estimate has been unchanged at 65 cents a share.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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