Quanta Services (NYSE:PWR) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Quanta Services, Inc. (NYSE:PWR) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of $1.09/share on revenue of $3.008 billion. The consensus earnings per share (EPS) of $1.09/share is based on a poll of 11 analysts and represents a decline in eps of −4.3% over the same quarter last year, when the company reported earnings of $1.14/share.

The revenue forecast of $3.008 billion based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −10.3%. Last year the company reported $3.353 billion in revenue for the quarter.

Expected to report EPS contraction of −4.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,008.36 $3,352.89 −10.3%
EPS $1.09 $1.14 −4.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Quanta Services, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.47 $0.74 57.5% Beat
Q1, 2020 $0.46 $0.47 1.6% Beat
Q4, 2019 $0.83 $0.93 11.6% Beat
Q3, 2019 $1.05 $1.14 9.0% Beat
Q2, 2019 $0.83 $0.31 −62.6% Missed
Q1, 2019 $0.83 $0.96 15.8% Beat
Q4, 2018 $0.90 $0.96 6.2% Beat
Q3, 2018 $0.98 $0.88 −10.0% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $42.78 $46.36 8.4% Increase
May 7, 2020 $33.91 $34.36 1.3% Increase
February 27, 2020 $37.08 $38.13 2.8% Increase
October 31, 2019 $41.98 $43.08 2.6% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.26, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.26 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Quanta Services, Inc. is currently trading at $61.14/share, down −1.8% for the day. The company is trading at approximately 95.3% of its 52-week high of $64.14/share. The company’s stock price is up 31.9% since the last earnings report and down −3.0% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 63.16 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:PWR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 23.14 and a forward P/E multiple of 17.99.

Quanta Services, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.17. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $61.14
P/E Ratio 23.1x
P/E Ratio (Fwd) 18.0x
PEG Ratio 1.7
Total Debt / Total Capital 16.2%
Levered Free Cash Flow $1.206 billion
EV / EBITDA 11.1x

Finbox

Quanta Services, Inc. is a mid-cap stock with a market capitalization of $8.489 billion and a total enterprise value of $9.632 billion. The company operates in the Industrials sector and the Construction & Engineering industry.

Quanta Services, Inc. provides specialty contracting services in the United States, Canada, Australia, Latin America, and internationally. Its Electric Power Infrastructure Services segment designs, installs, upgrades, repairs, and maintains electric power transmission and distribution infrastructure, and substation facilities, as well as provides other engineering and technical services; designs, installs, maintains, and repairs commercial and industrial wiring; and operates a postsecondary educational institution. It also offers emergency restoration services, including the repair of infrastructure damaged by inclement weather; installation, maintenance, and upgrade of electric power infrastructure; and installation of smart grid technologies on electric power networks. In addition, this segment provides services related to development of solar, wind, and various natural gas generation facilities, as well as related switchyards and transmission infrastructure; and construction of electric power generation facilities. The company’s Pipeline and Industrial Infrastructure Services segment designs, installs, repairs, and maintains pipeline transmission and distribution systems, gathering systems, production systems, storage systems, and compressor and pump stations, as well as offers related trenching, directional boring, and mechanized welding services; and designs, installs, and maintains fueling systems, and water and sewer infrastructure. This segment also provides pipeline protection, integrity testing, and rehabilitation and replacement, as well as pipeline support systems, and related structures and facilities fabrication services; and high-pressure and critical-path turnaround, electrical, piping, fabrication, and storage tank services. It serves electric power, energy, and communications companies, as well as commercial, industrial, and governmental entities. The company was founded in 1997 and is headquartered in Houston, Texas.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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