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Dycom (DY) Q3 Earnings & Revenues Beat Estimates, Rise Y/Y

Zacks Equity Research

Specialty contracting services provider, Dycom Industries Inc. DY kept its winning streak alive for the fifth consecutive quarter. The company’s third-quarter fiscal 2017 adjusted earnings of $1.30 a share beat the Zacks Consensus Estimate of $1.20 by 8.3%.

The figure also steered past the projected range of $1.11–$1.24. The bottom-line figure surged an impressive 20.4% compared with the year-ago figure of $1.08 per share. Robust operating performance, solid activity on recent contracts, cost discipline and a stellar top-line improvement proved conducive to earnings growth.

Inside the Headlines

Dycom’s third-quarter fiscal 2017 contract revenues continued the strong momentum and came in at $786.3 million, up 18.3% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $736 million and steered past the projected range of $715–$745 million.

Contract revenues grew 14.9% on an organic basis. Acquisitions also added $23.0 million, significantly supplementing the revenue stream. Extensive deployment of 1-Gigabyte wireline networks by major customers continued to fuel top-line growth during the quarter.

The company reported non-GAAP adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $108.2 million for the quarter compared with $99.1 million recorded a year ago.

Dycom Industries, Inc. Price, Consensus and EPS Surprise


Dycom Industries, Inc. Price, Consensus and EPS Surprise | Dycom Industries, Inc. Quote


Dycom exited the quarter with cash and cash equivalents of $19.4 million compared with $33.8 million as of Jul 30, 2016. The company’s long-term debt was $811.6 million as of Apr 29, 2017 compared with $706.2 million as of Jul 30, 2016.


Dycom issued guidance for fiscal fourth-quarter 2017, wherein adjusted earnings per share are projected in the range of $1.35–$1.50 on revenues within a range of $780–$810 million.

Notable Activities During the Quarter

During the reported quarter, Dycom completed the acquisition of telecommunications and construction services provider, Texstar Enterprises, for $26.4 million. Almost three decades old, the telecom and utilities construction company offers support and service to leading broadband and telephone companies in Southwest and Pacific Northwest.

To Conclude

Dycom delivered another solid quarter, marked by impressive top- and bottom-line beats and robust year-over-year growths. Over the past few quarters, Dycom’s profitability has soared on the back of increased demand for network bandwidth and mobile broadband, given the proliferation of smartphones.

In addition, rising capital expenditure by cable operators, who continue to deploy fiber in small and medium businesses, is also expected to stoke growth. Moreover, Dycom’s solid financial health and liquidity to fund bolt-on acquisitions looks promising. We believe that the Zacks Rank #2 (Buy) company’s blue-chip client list and healthy backlog further add to its strength.

Other Stocks to Consider

Other stocks in the industry include TopBuild Corp. BLD, Lennar Corporation LEN and EMCOR Group, Inc. EME. While TopBuild sports a Zacks Rank #1 (Strong Buy), Lennar ad EMCOR carry the same Zacks Rank as Dycom. You can see the complete list of today’s Zacks #1 Rank stocks here.

TopBuild has a positive average earnings surprise of 6.0% for the last four quarters, having beaten estimates thrice.

Lennar has a stellar earnings surprise history, with an average positive surprise of 8.7%, beating estimates all through.

EMCOR Group has a decent earnings beat history, having surpassed estimates thrice over the trailing four quarters. It has an average positive surprise of 15.4% over the same time frame.

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