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

Quanta Services, Inc. PWR is scheduled to report first-quarter 2021 results on May 6, before the opening bell.

In the last reported quarter, the company’s top and bottom lines surpassed the Zacks Consensus Estimate by 0.2% and 24.5%, respectively. Its earnings increased 31.2% from the prior year but revenues declined 6.4%.

Encouragingly, earnings topped analysts’ expectation in five of the trailing six quarters.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings for the quarter to be reported has increased 1.4% over the past 60 days to 74 cents per share. The said figure indicates a 57.5% increase from the year-ago earnings of 47 cents per share. The consensus mark for revenues is $2.76 billion, suggesting 0.2% year-over-year fall.

Quanta Services, Inc. Price and EPS Surprise

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

Factors to Note

Quanta Services’ first-quarter revenues are expected to have declined owing to lower contribution from the Underground Utility and Infrastructure Solutions business. Earlier known as Pipeline and Industrial Infrastructure Services, the segment has been witnessing COVID-related downgraded commodity prices, which might have impacted the company’s overall performance. Also, the business is grappling with lack of demand stemming from decreased global travel activity associated with the pandemic and reduced contributions from larger pipeline projects.

In fact, it is expected to have grabbed lesser pipeline and industrial capital projects due to a low commodity price environment as well as reduction in customer capital budget. In addition to these issues, increased restrictions on oil and gas production activities may put a pressure on top-line results. The company expects revenues from the Underground Utility and Infrastructure business to decline more than 20% from first-quarter 2020.

The consensus estimate for the segment’s revenues is pegged at $771 million, implying fall of 22.7% from $997 million reported in the year-ago period.

Within the Electric Power Infrastructure Services segment, first-quarter revenues are likely to be the lowest in a year, primarily due to seasonal weather dynamics and their impact on certain construction activities. For the Electric Power unit, first-quarter operating margins are also expected to be the lowest for the year, possibly below 10%.

Nonetheless, higher profitability from the LUMA joint venture and other integral unconsolidated affiliates are likely to have supported bottom-line growth in the to-be-reported quarter. Also, communications and electric operations might have added to the positives.

The Zacks Consensus Estimate for the segment’s revenues is pegged at $1,967 million, implying 11.3% growth from a year ago.

What Our Model Indicates

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

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Engineering - R and D Services sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

AECOM ACM has an Earnings ESP of +2.93% and carries a Zacks Rank #2.

Fluor Corporation FLR has an Earnings ESP of +107.69% and carries a Zacks Rank #3.

ChampionX Corporation CHX has an Earnings ESP of +20.97% and carries a Zacks Rank #3.

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