Following what has become a pattern during this earnings season for many S&P 500 companies, Quanta Services Inc. (PWR) reported increased earnings for the fourth quarter of 2012 that beat analyst predictions, but issued a cautious forecast for 2013. Headquartered in Houston, Texas, Quanta provides and maintains network infrastructure for electric power, natural gas and pipeline companies.
For the fourth quarter, revenue was $1.67 billion, versus $1.39 billion in the year prior quarter. Net income from continuing operations attributable to common stock was $102.4 million, or $0.48 per share, in the fourth quarter of 2012, compared to $58.7 million, or $0.28 per share, in the fourth quarter of 2011. Excluding items, adjusted earnings equaled $109.03 million, or 51 cents per share.
Analysts were expecting EPS of only 35 cents on revenue of $1.59 billion.
Revenue from Quanta’s largest segment, electric power, increased 21 percent to $1.18 billion in the fourth quarter.
“Our record fourth quarter performance was the culmination of the best year in our company’s history. During the year, we achieved nearly 36% internal revenue growth, expanded our margins and improved our industry leading safety results,” said Jim O’Neil, president and chief executive officer of Quanta Services.
Revenues for the full 2012 year were $5.92 billion compared to $4.19 billion for 2011. Complete year net income from continued operations was $289.7 million, or $1.36 per share. Non-GAAP earnings per share from continuing operations for the full year were $1.52 for 2012 as compared to $0.76 for 2011.
In December 2012, Quanta exited its telecommunications business by closing the sale of its telecommunications subsidiaries to Dycom Industries, Inc. (DY) for net proceeds of approximately $265 million as it aims to increase its efforts on the energy infrastructure segment. The subsidiaries included in the transaction comprised substantially all of Quanta’s former domestic telecommunications infrastructure services operations.
Looking forward, Quanta said that it sees its business as “positive,” but warns that regulatory and permitting challenges my impact project timing. Further, the company said it expects a reduction in emergency restoration revenues to “more normalized levels” after a substantial surge in 2012.
With that, Quanta is forecasting first-quarter revenue in the range of $1.3 billion to $1.4 billion and EPS between 28 cents and 30 cents. Non-GAAP EPS is guided for between 31 cents and 33 cents. For all of 2013, the company believes revenue will be between $5.7 billion and $6.2 billion and that adjusted EPS will fall in the range of $1.23 to $1.53.
Analysts were expecting to hear that first-quarter earnings would be 27 cents per share on revenue of $1.45 billion.
Shares of PWR have been on a steady upward march over the past 52 weeks, advancing about 30 percent in that time. Shares closed down by 2.6 percent on Wednesday at $28.14.