Quanta Services Inc. (PWR) reported its fourth-quarter and full-year 2010 earnings results before the market opened today. For the fourth quarter of 2010, adjusted earnings per share came in at 23 cents, beating the Zacks Consensus Estimate of 16 cents but below the prior-year earnings per share of 31 cents.
Adjusted earnings per share were 92 cents for 2010, outpacing the Zacks Consensus Estimate of 74 cents and prior-year earnings of 90 cents.
Total Revenue
Total revenue for the quarter was $1.11 billion compared with $985.4 million in the prior-year quarter. Consolidated backlog at the end of the quarter was $2.87 billion compared with $6.32 billion. Revenue for the quarter includes the impact of Valard Construction acquisition, completed on October 25, 2010.
For full year, total revenue was $3.93 billion compared with $3.32 billion in 2009. In 2010, the company’s total backlog for electric power and telecommunications segments surged appreciably in comparison with 2009.
Segment Details
Electric Power revenue in the quarter was $595.5 million compared with $516.3 million in the prior-year period. Natural Gas and Pipeline revenue was $399.5 million compared with $351.5 million, Telecommunications revenue was $83.4 million compared with $94.3 million and Fiber Optic Licensing revenue was $28.0 million compared with $23.2 million.
Backlog came in at $1,798.3 million, $744.0 million, $228.5 million and $98.8 million in Electric Power, Natural Gas and Pipeline, Telecommunications and Fiber Optic Licensing segment, respectively.
Income and Expenses
Operating Income in the quarter was $54.5 million compared with $72.4 million in the prior-year quarter. SG&A expense was $94.5 million compared with $94.8 million.
Segment operating income was $59.3 million, $21.8 million, $2.4 million and $13.4 million in Electric Power, Natural Gas and Pipeline, Telecommunications and Fiber Optic Licensing segment, respectively.
Outlook
For the first quarter of 2011, the company expects its total revenue to be in the range of $775 million to $825 million and diluted earnings per share to be $0.02 to $0.03. Adjusted diluted earnings per share (a non-GAAP measure) for the first quarter are expected to be $0.06 to $0.07.
Quanta Services has been witnessing an increased customer spending as they have started to invest in infrastructure with the improving economic environment, leading the company to believe that it has overcome the worst phase of the recession. The company expects to benefit significantly from the ongoing bidding processes in its Natural Gas and Pipeline segment, leading to a continuous increase in the segment’s backlog.
However, the industry in which Quanta operates, is served by numerous small owner-operated private companies, some public companies and several large regional companies. In addition, relatively few barriers prevent entry into some of the industries. As a result, any organization that has adequate financial resources and access to technical expertise may become one of its competitors. Competition in the industry depends on a number of factors, including price. Major competitors of Quanta Services are EMCOR Group Inc. (EME), Integrated Electrical Services Inc. (IESC) and MYR Group Inc. (MYRG).
Quanta Services Inc. (Quanta) 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: (1) Electric Power Infrastructure Services, (2) Natural Gas and Pipeline Infrastructure Services, (3) Telecommunications Infrastructure Services and (4) Fiber Optic Licensing.
Quanta Services currently holds a Zacks #3 Rank (short-term Hold recommendation) on the stock.
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