Quanta Services (PWR) to Post Q2 Earnings: What to Expect?

Quanta Services, Inc. PWR is scheduled to report second-quarter 2022 results on Aug 4, before the opening bell.

In the last-reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 12.3% and grew 65.1% year over year. Total revenues surpassed the consensus mark by 8.1% and increased 47% year over year.

Encouragingly, earnings topped analysts’ expectations in 12 of the trailing 13 quarters.

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter earnings has moved downward to $1.51 from $1.54 per share over the past 30 days. The estimated figure indicates a 42.5% increase from the year-ago earnings of $1.06 per share. The consensus mark for revenues is $4.02 billion, suggesting a 34% year-over-year rise.

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

More demand for infrastructure solutions that help support customers' energy-transition initiatives and modernization will help PWR to drive growth in the to-be-reported quarter. The company has been capitalizing on the megatrends to lead the energy transition and enable technological development. Initiatives such as electric vehicle charging infrastructure and undergrounding of electrical infrastructure are gaining momentum. These factors should help the company to boost its profit level.

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.

The Zacks Consensus Estimate for the Electric Power segment’s revenues is pegged at $2,017 million, implying a decline from $2,148 million 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.

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  of 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. This addition is expected to have contributed to the company’s top line in the quarter.

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 -1.44%.

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

Few Recent Construction Releases

EMCOR Group, Inc. EME reported solid results for second-quarter 2022. The top and bottom lines surpassed the Zacks Consensus Estimate and increased year over year.

EME’s management approved a 15.4% hike in its regular quarterly dividend to 15 cents, payable on Oct 31 to stockholders of record as of Oct 18, 2022. Also, it authorized a new share repurchase program to repurchase up to an additional $500 million of its outstanding common stock.

United Rentals, Inc. URI posted better-than-expected second-quarter 2022 results. Better fleet productivity on broad-based rental demand in construction and industrial verticals, higher total and rental revenues along with stronger pricing helped the company to boost profit.

URI also lifted its full-year guidance for total revenues, adjusted EBITDA and free cash flow, given broad-based end-market activity, contractor backlogs, customer sentiment and our visibility through the balance of the year.

Martin Marietta Materials, Inc. MLM reported impressive second-quarter 2022 results. Earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis, backed by improved pricing across businesses and higher demand.

Despite increased inflationary pressure from rising input costs and a challenging macroeconomic and geopolitical environment, solid execution of its strategic business plan and resilient aggregates-led business drove the result.

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