Dycom (DY) Gears Up to Post Q2 Earnings: What's in Store?
Dycom Industries, Inc. DY is scheduled to report second-quarter fiscal 2024 results on Aug 23, before the opening bell.
In the last reported quarter, its earnings surpassed the Zacks Consensus Estimate by 147.1% and rose massively to $1.73 from 51 cents reported a year ago. Revenues also increased by 19.3% year over year and topped the consensus mark by 11.2%. The company witnessed an increase in demand from four of its top five customers.
This specialty contracting services provider surpassed earnings estimates in each of the trailing four quarters.
Earnings & Revenues Expectations
The Zacks Consensus Estimate for Dycom’s fiscal second-quarter earnings has remained stable at $1.66 in the past 60 days. The estimated figure indicates a 13.7% increase on a year-over-year basis.
Dycom Industries, Inc. Price and EPS Surprise
Dycom Industries, Inc. price-eps-surprise | Dycom Industries, Inc. Quote
The consensus estimate for revenues is pegged at $1.04 billion, indicating a 7.3% year-over-year rise.
Factors to Note
Dycom’s revenues and earnings are expected to have increased in the fiscal second quarter, given strong demand, an extended geographic reach, proficient program management and network planning services. The company has been witnessing increased demand for network bandwidth and mobile broadband.
Impressive fiber-to-the-home deployments from six of its top 10 customers are likely to have contributed to fiscal second-quarter revenues. It continues to book new contracts and renew existing ones based on strong customer relationships.
For the quarter to be reported, DY expects contract revenues to grow in mid-single digits from the year-ago reported figure. The adjusted EBITDA margin is expected to increase by 50-100 basis points from the year-ago level.
Our model predicts second-quarter revenues in the Telecommunications segment to be $932.5 million, indicating growth of 7.1% from the prior quarter’s figure. Revenues for the Underground Facility unit is pegged at $71.8 million, flat from the prior quarter’s level. The consensus mark for Electrical and gas utilities and other business revenues is pegged at $32.7 million, indicating an increase of 9.4% year over year.
The Zacks Consensus Estimate for the second quarter-end backlog is pegged at $6.322 billion, indicating an increase from $6.028 billion reported in the prior quarter.
Yet, tight labor and higher costs are likely to have put pressure on the company’s to-be-reported quarter’s performance. Dycom faces automotive and equipment supply chain challenges and foreign currency exchange rate risk. Fluctuations in oil prices are a major headwind for the company, as the cost of conducting business is directly linked to an increase in fuel prices.
For the period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.7 million. Interest expenses are likely to be $12.2 million.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Dycom this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.
Dycom currently has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
DY carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
A Few Construction Releases
AECOM ACM reported mixed third-quarter fiscal 2023 results, with revenues surpassing the Zacks Consensus Estimate and earnings missing the same.
On a year-over-year basis, the top and bottom lines increased, backed by double-digit organic net service revenues growth in ACM’s design business.
Fluor Corporation FLR recently posted solid earnings for second-quarter 2023, which were more than double the Zacks Consensus Estimate and above five times the year-ago figure. Revenues also topped the consensus mark by 9.1% and increased by 19.4% from the year-ago level.
FLR’s second quarter top-line was backed by a ramp-up of execution activities on several recently awarded projects in the Energy Solutions, Urban Solutions and Mission Solutions segments, partially offset by declines in the volume of execution activity for projects that were completed or nearing completion.
KBR, Inc. KBR reported mixed second-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus estimate for the seventh straight quarter. Revenues, on the other hand, surpassed the mark in three of the trailing seven quarters and missed on other four occasions.
Although KBR’s quarterly earnings were impacted by losses related to convertible notes and a legacy legal matter, the company delivered a strong quarter of financial and environmental, social and governance or ESG performance, underpinned by its mission focus and operational discipline.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Fluor Corporation (FLR) : Free Stock Analysis Report
AECOM (ACM) : Free Stock Analysis Report
KBR, Inc. (KBR) : Free Stock Analysis Report
Dycom Industries, Inc. (DY) : Free Stock Analysis Report
