Quanta Services Inc. (PWR) reported 2010 third quarter earnings from continuing operations of 26 cents per share, below the Zacks Consensus Estimate. Revenues for the quarter came in at $1.21 billion, above the Zacks Consensus revenue estimate of $1.14 billion.
Quanta completed the acquisition of Price Gregory Services Inc. on Oct 1, 2009. Therefore, these reported results of operations include the results of Price Gregory.
During the third quarter, the company had a benefit of approximately four cents per share in connection with the release of contingent income tax reserve.
Quanta and its customers continue to operate in a challenging business environment in light of the economic downturn and tentative capital markets. For the preceding six months the company’s fortunes have been negatively impacted by project delays and lower than expected margins on two pipeline projects due to above-average rainfall. Projections for 2010 have been negatively impacted by project delays and rescheduling that is directly caused by the need for increased regulatory compliances.
On Oct. 25, 2010, Quanta completed the acquisition of Valard Construction, based in Edmonton, Alberta. Valard delivers EPC services and turnkey solutions in Canada.
Quanta expects revenues for the fourth quarter of 2010 to range between $950 million and $1.05 billion. Diluted earnings per share for the fourth quarter of 2010 are expected between 15 cents and 17 cents.
As a result of its nationwide operations and significant scale, Quanta Services is able to deploy services to customers across the United States. This capability is particularly important to customers who operate networks that span multiple states or regions.
The scale of its operations also allows it to mobilize a significant number of employees on short notice for emergency restoration services. Its customer relationships extend over multiple end markets and include electric power, gas, telecommunications and cable television companies, as well as commercial, industrial and governmental entities.
Quanta has established a solid base of long-standing customer relationships by providing high quality services in a cost-efficient and timely manner. Many of its customer relationships are multi-year and, in some cases, decades old.
The company is one of the few network service providers capable of regularly delivering complete solutions on a nationwide basis. As companies in the electric power, gas, telecommunications and cable television industries continue to search for service providers who can effectively design, install and maintain their networks, Quanta Services believes that its service, industry and geographical breadth places it in a strong position to meet these needs.
Quanta Services is a leading national provider of specialty contracting services, and is one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry.
Effective during the quarter ended Sep 30, 2009, Quanta began reporting its results under four reportable segments: Electric Power Infrastructure Services, Natural Gas and Pipeline Infrastructure Services, Telecommunications Infrastructure Services and Fiber Optic Licensing.
We currently have a Neutral recommendation on Quanta Services.
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