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Dycom (DY) to Report Q1 Earnings: What's in the Offing?

Dycom Industries, Inc. DY is scheduled to report first-quarter fiscal 2021 results on May 19, before the opening bell.

In the last reported quarter, it reported adjusted loss of 23 cents per share, wider than the Zacks Consensus Estimate of a loss of 2 cents. In the year-ago quarter, the company had reported earnings of 10 cents per share. Dycom’s quarterly contract revenues came in at $737.6 million, increasing 1.5% year over year. The reported figure also surpassed the consensus mark of $727.6 million by 1.4%. The company highlighted that adverse weather, seasonal effects, challenges surrounding a large customer program, and a slow start with a specific customer in rolling out its new system weighed on margins in the quarter.

This specialty contracting services provider — which shares space in the Building Products - Heavy Construction industry with EMCOR Group, Inc. EME, MasTec, Inc. MTZ and North American Construction Group Ltd. NOA — outperformed the industry in the past six months. The stock has lost 8.1% against the industry’s growth of 29.5% in the said period.

 

 

Earnings & Revenue Expectations

The Zacks Consensus Estimate for Dycom’s fiscal first-quarter bottom line has widened from a loss of 1 cent to loss of 3 cents per share over the past 30 days. The bottom-line estimate indicates a 105.7% decline on a year-over-year basis. The consensus estimate for revenues is $738.7 million, indicating 11.4% year-over-year fall.

Dycom Industries, Inc. Price and EPS Surprise

Dycom Industries, Inc. price-eps-surprise | Dycom Industries, Inc. Quote

Factors to Note

Dycom’s revenues and earnings are expected to have declined in the quarter to be reported, thanks to lower-than-expected activity levels due to challenging market conditions, crew health concerns and permitting delays, despite that fact that the majority of its work is deemed essential. Also, challenges surrounding a large customer program, and a slow start with a specific customer in rolling out its new system may have added to the woes.

During fourth-quarter fiscal 2020 earnings call, the company had projected contract revenues in the range of $730-$780 million for the fiscal first quarter, indicating a decline from $833.7 million reported a year ago.

From the margins perspective, it has been experiencing lower EBITDA margins. The company pointed out that although major customers have stepped up infrastructure spending, higher-than-expected costs of a large customer program have been denting margins. It expects the bottom line for the fiscal first quarter between a loss of 9 cents and earnings of 8 cents per share on an adjusted basis. The prior-year reported earnings were 53 cents per share. It also expects adjusted EBITDA margin to decrease from the year-ago period.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Dycom this time around. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive surprise. This is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -100.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

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EMCOR Group, Inc. (EME): Free Stock Analysis Report
 
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