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Quanta Services (PWR) to Post Q1 Earnings: What to Expect?

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Quanta Services, Inc. PWR is scheduled to report first-quarter 2022 results on May 5, before the opening bell.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 9.2% and grew 26.2% year over year. Total revenues surpassed the consensus mark by 6.5% and increased 34.7% year over year.

Encouragingly, earnings topped analysts’ expectations in 11 of the trailing 12 quarters.

Trend in Estimate Revision

The Zacks Consensus Estimate for first-quarter earnings has moved 6.2% downward over the past 30 days at $1.22 per share. The said figure indicates a 47% increase from the year-ago earnings of 83 cents per share. The consensus mark for revenues is $3.67 billion, suggesting a 35.6% year-over-year rise.

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

Overall, Quanta Services’ first-quarter traditionally has lower activity due to weather seasonality, which impacts its revenues and margins. Nonetheless, more demand for infrastructure solutions that help support customers' energy-transition initiatives and modernization will help PWR to drive growth.

Segment-wise, the Electric Power Infrastructure Services segment (accounting for almost 59% of total revenues) is likely to have benefited from broad-based business strength driven by ongoing grid modernization, system hardening, renewable energy interconnections and solid execution. Also, contributions from larger transmission projects underway in Canada and revenues from the acquired businesses are likely to have supported bottom-line growth in the to-be-reported quarter. Also, higher profitability from the LUMA joint venture and other integral unconsolidated affiliates along with communications and electric operations, might have added to the positives.

Within this segment, PWR expects first-quarter operating margins for the communication business to be around 10%.

The Zacks Consensus Estimate for the Electric Power segment’s revenues is pegged at $1,938 million, implying a 5.9% decline from a year ago.

The Underground Utility and Infrastructure Solutions segment (accounting for almost 14% of total revenues) has been benefiting from higher demand for gas utility and pipeline integrity services and pent-up demand for the services that were deferred due to the effects of COVID-19 on the downstream market. Uncertainties in the energy market and economy caused by COVID-19 have been impacting the segment performances. Historically, the company’s first-quarter traditionally has lower activity in the segment due to weather seasonality, which impacts the company’s revenues. Margins are expected to be slightly below mid-single digits.

The consensus estimate for the Underground Utility segment’s revenues is pegged at $847 million.

With the addition of Blattner to its portfolio, PWR has started reporting through three segments by adding a new Renewable Energy Infrastructure Solutions segment during the fourth-quarter 2021. This platform consists of services and solutions for infrastructure supporting the delivery of renewable energy, including renewable generation, electric transmission, substations and battery storage, with Blattner's operations representing the majority of those solutions. The company expects segment revenues to be between $900 million and $950 million in the first quarter. It also expects margins for the first quarter to be the lowest for the year, likely around 8%.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Quanta Services this time around. A 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of -5.17%.

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

A Few Recent Construction Releases

United Rentals, Inc. URI reported better-than-expected first-quarter 2022 results. Better fleet productivity on broad-based rental demand in construction and industrial verticals, higher total and rental revenues, and stronger pricing helped the company start 2022 on a solid note.

URI also lifted its full-year guidance for total revenues, adjusted EBITDA and free cash flow, given customer sentiments and solid project activity.

NVR, Inc. NVR reported first-quarter 2022 results, with earnings and revenues beating the respective Zacks Consensus Estimate and increasing year over year.

NVR’s first-quarter results benefited from a higher average price of settlements and lower lumber prices.

Masco Corporation MAS reported solid results for first-quarter 2022. The top and the bottom line surpassed the Zacks Consensus Estimate and improved on a year-over-year basis.

Masco’s results were mainly backed by solid demand for its products and operational efficiencies.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Quanta Services, Inc. (PWR) : Free Stock Analysis Report

Masco Corporation (MAS) : Free Stock Analysis Report

NVR, Inc. (NVR) : Free Stock Analysis Report

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