Dycom (DY) Gears Up for Q3 Earnings: What's in the Offing?
Dycom Industries, Inc. DY is scheduled to report third-quarter fiscal 2024 results on Nov 21, before the opening bell.
In the last reported quarter, its earnings surpassed the Zacks Consensus Estimate by 22.3% and rose to $1.66 from $1.46 reported a year ago. Revenues also increased by 7.1% year over year but missed the consensus mark by 0.2%.
This specialty contracting services provider surpassed earnings estimates in each of the trailing four quarters.
Earnings & Revenue Expectations
The Zacks Consensus Estimate for Dycom’s fiscal third-quarter earnings has remained stable at $1.77 in the past 30 days. The estimated figure indicates a 4.7% increase on a year-over-year basis.
The consensus estimate for revenues is pegged at $1.07 billion, implying a 2.6% year-over-year rise.
Factors to Note
Dycom is anticipated to experience an uptick in revenues and earnings for the third fiscal quarter, driven by robust demand, an expanded geographic presence, effective program management and network planning services. The company has observed a growing need for network bandwidth and mobile broadband.
For the fiscal third quarter, management expects contract revenues to be in line with the year-ago level. DY projects $30 million of acquired contract revenues for the quarter.
Our model predicts third-quarter revenues in the total Telecommunications segment to be $967.7 million, indicating growth of 2.9% from the prior quarter’s figure. Revenues for the Underground Facility unit are forecast to be $72 million, suggesting to remain almost flat from the prior quarter’s level. The consensus mark for Electrical and gas utilities and other business revenues is pegged at $29.6 million, implying to remain almost unchanged year over year.
However, challenges such as labor shortages and increased costs are expected to have exerted pressure on Dycom's quarterly performance. The company is grappling with issues in the automotive and equipment supply chain along with the risk associated with foreign currency exchange rates. Fluctuations in oil prices pose a significant obstacle for DY, as higher fuel prices directly impact the cost of doing business.
For the period, Dycom expects the effective tax rate to be 26% and diluted shares of 29.7 million. Interest expenses, net, and amortization costs are likely to be $13.3 million and $6.1 million, respectively.
Dycom Industries, Inc. Price and EPS Surprise
Dycom Industries, Inc. price-eps-surprise | Dycom Industries, Inc. Quote
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, which is not the case here.
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.
Peer Releases
KBR, Inc. KBR reported mixed third-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same.
Earnings beat the consensus estimate for the eighth straight quarter. Revenues, on the other hand, outpaced the mark in three of the trailing eight quarters and missed on the remaining five occasions.
Quanta Services Inc. PWR reported better-than-expected results for third-quarter 2023, wherein adjusted earnings and revenues beat the Zacks Consensus Estimate. Both metrics were up on a year-over-year basis.
PWR continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
Fluor Corporation FLR reported stellar results for third-quarter 2023, wherein earnings and revenues surpassed the Zacks Consensus Estimate and increased from the previous year on the back of solid demand for its engineering and construction solutions.
Given FLR’s positive advances on large Energy Solutions projects and continued progress on projects in its legacy portfolio, management lifted its expectations for 2023.
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