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Dycom Beats on Earnings

Zacks Equity Research

Dycom Industries, Inc. (DY) recently released its third quarter 2013 results with an EPS of 21 cents per share, beating Zacks Consensus Estimate of 17 cents by 23.5%. However it was down by 25% compared to 28 cents in the year-earlier quarter.

Earnings in the quarter included a lesser amount of pre-tax gains on asset sales, as compared to the year-ago quarter. The gain was $1.5 million during the quarter, as compared to $7.4 million in the year-earlier quarter.


Dycom reported total contract revenue of $ 437.4 million, up 47.7% from that in the prior year quarter. The revenues benefited a strongly on organic basis, which grew almost 6.2% year over year. Revenues in the quarter benefited strongly from subsidiaries acquired during last few quarters. The company recorded a benefit of $122.9 million from its recent acquisition of Quanta Services.

Contract for the nine months ended April 27, 2013 were $1.130 billion compared to $883.1 million in the year-ago period


Net income for the quarter was $7.2 million with an adjusted EBITDA (non-GAAP) of $44.0 million. Net income experienced a 25% decline year over year, while EBITDA was up 47.2%.

Apart from the pre-tax gains on asset sales during the quarter, the company had to incur a pre-tax acquisition-related cost in relation to its recent acquisition of Quanta Services, and a pre-tax deferred financing cost of $0.3 million related to the replacement of its credit facility in Dec 2012.

Balance Sheet

Cash, cash equivalents reached approximately $18.2 million at the end of the quarter with long-term debt of $433.6 million.

Moving Ahead

The company believes its strong competitive position and strategic market initiatives will facilitate it to perform well as it moves ahead. Revenue in fourth quarter fiscal 2013 is expected to be in the range of $455.0 million to $475.0 million, with an EPS in the range of 40 cents to 47 cents.

Dycom currently has a Zacks Rank #3 (Hold), while other sector participants are performing better. Primoris Services (PRIM) has Zacks Rank #1 (Strong Buy), while Chicago Bridge (CBI) and Orion Marine Group (ORN) has Zacks Rank #2 (Buy).

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