Wednesday, contracting services provider Quanta Services, Inc. (PWR) reported a decline in its second-quarter profit, hurt mainly by lower revenues amid the economic turmoil. Further, the company issued forecast for third-quarter earnings and revenues, stating that the market outlook shows improvement for the second half of the year.
Second-quarter net income fell to $33.64 million from last year's $37.67 million. Net income attributable to common stock declined to $33.43 million or $0.17 per share from $37.67 million or $0.21 per share in the year earlier period.
The company noted that its prior-year results have been restated to reflect the impact of the adoption of two new accounting standards.
Excluding items, net income attributable to common stock fell to $40.15 million or $0.20 per share from $49.49 million or $0.26 per share last year.
On average, 11 analysts polled by Thomson Reuters expected earnings of $0.16 per share for the quarter. Analysts' estimate typically exclude special items.
Revenues for the quarter dropped to $813.38 million from $960.88 million in the comparable period, and missed twelve Wall Street analysts' consensus estimate of $860.64 million.
Quanta was projecting second-quarter earnings between $0.14 and $0.15 per share, cash earnings between $0.17 and $0.18 per share, and revenues between $850 million and $890 million.
Second-quarter gross profit fell to $137.78 million from $158.69 million a year ago, and operating income fell to $59.91 million from $72.52 million last year.
In the preceding first quarter, Quanta Services had reported a slight increase in net income to $21.49 million, while net income attributable to common stock to $21.35 million or $0.11 per share, and adjusted net income attributable to common stock fell to $27.90 million or $0.14 per share. Revenues were $738.53 million, lower than last year.
Among peers, construction and facilities services provider EMCOR Group, Inc. (EME) last week reported an increase in its second-quarter profit to $44.82 million or $0.67 per share from $43.95 million or $0.65 per share in the previous year, helped mainly by lower selling, general and administrative costs. Meanwhile, revenues for the period dipped to $1.42 billion from $1.72 billion last year.
For the first six months of 2009, Quanta Services reported net income attributable to common stock of $54.78 million or $0.28 per share, compared to $59.14 million or $0.34 per share last year. Adjusted net income attributable to common stock was $68.04 million or $0.34 per share, down from prior year's $82.66 million or $0.44 per share. First-half revenues were $1.55 billion, compared to $1.81 billion for the first half of 2008.
Looking ahead to the third-quarter, Quanta Services expects earnings per share in the range of $0.20 to $0.21 and adjusted earnings per share of $0.23 to $0.24.
Third-quarter revenues are projected between $840 million and $870 million. The estimate reflects a forecast of emergency restoration service revenues of $21 million, sharply lower than prior year's about $114.7 million.
Analysts expect earnings of $0.28 per share for the quarter, with estimate ranging between $0.24 and $0.37 per share, on revenues of $1.04 billion for the third quarter.
John Colson, Quanta Services chairman and Chief Executive Officer, stated, "Despite an environment of economic turmoil, with customers awaiting government funding and most of the country still struggling with uncertainty, our market outlook shows improvement for the second half of this year. -- Our focus on effectively maintaining margins during the current economic environment should position us well as spending by our customers returns. We continue to receive indications from our customers that 2010 and 2011 will reflect further strengthening in our end markets."
While announcing the first quarter results, Colson had noted that electric transmission and renewable energy projects are the growth engines that will allow the company to thrive throughout a challenging economic environment for the next several months. He also had said at that time, "We are optimistic that the second half of 2009 will see increased spending by our customers and, because of our higher total backlog, the beginning of a full recovery and growth in our markets in 2010 and beyond."
PWR closed Tuesday's regular trading session at $23.44, up $0.06, on a volume of 3.2 million shares.
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