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Is Quanta (PWR) Poised to Beat Earnings Estimates in Q2?

Zacks Equity Research
·4 min read

Quanta Services, Inc. PWR is scheduled to report second-quarter 2020 results on Aug 6, before the opening bell.

In the last reported quarter, the company’s earnings met the Zacks Consensus Estimate but revenues missed the same by 0.04%. On a year-over-year basis, its earnings and revenues fell 51% and 1.5% from the prior year, respectively.

Quanta’s earnings topped the consensus mark in two of the last four quarters, missed once and met on another occasion, with the average negative surprise being 10.7%.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings for the quarter to be reported has declined 2% over the past 30 days to 48 cents per share. The said figure indicates a 54.8% increase from the year-ago earnings of 31 cents per share. However, the consensus mark for revenues is $2.54 billion, suggesting 10.7% year-over-year fall.

Quanta Services, Inc. Price and EPS Surprise

Quanta Services, Inc. Price and EPS Surprise
Quanta Services, Inc. Price and EPS Surprise

Quanta Services, Inc. price-eps-surprise | Quanta Services, Inc. Quote

Factors to Note

Quanta’s second-quarter revenues are expected to have been hit by disruptions caused by the coronavirus outbreak in some of the company’s operations. This apart, challenges in the broader energy market will likely reflect on its Pipeline and Industrial segment’s results.

Segment-wise, robust spending by electric utilities on grid modernization and infrastructure hardening — particularly in the western United States — as well as by gas utilities on distribution system modernization and safety programs are likely to have benefited the Electric Power segment. It is important to note that approximately 65% of Quanta's revenues are directly tied to regulated electric and gas utility customers, which is core to the business. Also, throughout its service territories, it actively pursued billions of dollars of larger electric transmission projects with minimal disruption.

The Zacks Consensus Estimate for the segment’s revenues is pegged at $1,930 million, implying 11.3% growth from a year ago.

Its Pipeline and Industrial Infrastructure Services segment’s results are likely to reflect the effects of COVID-related restrictions and low oil prices.

The consensus estimate for the segment’s revenues is pegged at $1,158 million, implying fall of 4.8% from the year-ago period.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Quanta 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.

Earnings ESP: The company has an Earnings ESP of +10.42%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are some other companies in the Zacks Construction sector, which according to our model also have the right combination of elements to post an earnings beat in their respective quarters to be reported.

TopBuild Corp. BLD has an Earnings ESP of +29.11% and holds a Zacks Rank #1.

JELD-WEN Holding, Inc. JELD has an Earnings ESP of +10.09% and carries a Zacks Rank #2.

KBR, Inc. KBR has an Earnings ESP of +11.11% and carries a Zacks Rank #3.

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