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Dycom shares rise on strong fiscal 3Q results

NEW YORK (AP) -- Shares of Dycom Industries Inc. rose to a 14-month high Wednesday after the telecommunications contractor posted better-than-expected results for its fiscal third-quarter and issued a strong guidance for the current period.

THE SPARK: Dycom said late Tuesday that it earned $7.2 million, or 21 cents per share, down 25 percent from $9.6 million, or 28 cents per share, in the year-ago period. Contract revenue jumped 48 percent to $437.4 million from $296.1 million.

Analysts, on average, expected earnings of 17 cents per share on $410.2 million in revenue, according to FactSet.

For the fiscal fourth-quarter, the company projected earnings of 40 cents to 47 cents per share on $455 million to $475 million in revenue. Analysts expect earnings of 38 cents per share on $441 million in revenue.

THE BIG PICTURE: The Palm Beach Gardens, Fla., company provides a variety of specialty contracting services including engineering, construction and maintenance to telecommunications companies throughout the U.S. and Canada.

Dycom's results for the recent quarter got a boost from its December acquisition of Quanta Services Inc. subsidiaries, which supplied $122.9 million in revenue. Excluding that, revenue rose 6 percent.

THE ANALYSIS: Stifel Nicolaus analyst Noelle Dilts reaffirmed her "Buy" rating for the stock, saying that while the acquisitions helped more than expected, the company's core operations also were strong.

Dilts added that she still thinks that Dycom's outlook for the recently acquired operations is conservative.

Raymond James' Simon Leopold backed his "Outperform" rating. He noted that as a provider of construction and installation services for the largest telecommunications companies in North America, Dycom provides a window into their spending plans for the overall industry.

THE SHARES: Up $1.91, or 9 percent, to $22.32 in midday trading after peaking at $23.65 earlier in the day and marking their highest price since March 2012,