01—Abstract
Summary
Summary of the 10-K filed February 29, 2016. Cited figures are marked; the original filing is the authoritative source.
Quanta Services, Inc. reported revenues of $7.57 billiona for the fiscal year ended December 31, 2015, a slight decrease of 2.3% compared to the prior year.
This decline was primarily driven by reduced customer spending and project delays in the Electric Power Infrastructure Services segment, impacted by regulatory and permitting issues. Conversely, the Oil and Gas Infrastructure Services segment saw revenue growth, bolstered by recent acquisitions. Despite the revenue dip, the company completed significant acquisitions, enhancing its service offerings.
However, gross profit declined by 21% due to a less favorable project mix, with a shift towards lower-margin work and specific project losses, alongside a significant goodwill and intangible asset impairment charge of $58.5 millionb, largely attributed to the prolonged low commodity price environment impacting its Oil and Gas segment. The company continues to manage its operations with a strong focus on strategic growth and financial discipline, reflected in its robust credit facility and ongoing efforts to optimize its service portfolio.
02—Key points
Key Highlights
- Revenue of $7.57 billion for fiscal year 2015, a 2.3% decrease year-over-year, primarily due to softer performance in the Electric Power Infrastructure Services segment.
- Gross profit decreased by 21% to $923.7 million, with gross margin declining to 12.2% from 15.1% in the prior year, impacted by project mix and specific project losses.
- Recorded asset impairment charges totaling $58.5 million in 2015, primarily related to goodwill and intangible assets in the Oil and Gas segment due to low commodity prices.
- Completed 11 acquisitions in 2015, focused on expanding capabilities in both Electric Power and Oil and Gas infrastructure services.
- Sold fiber optic licensing operations for approximately $1 billion cash, recognizing a net after-tax gain of $171 million.
- Significant stock repurchases occurred in 2015, with $1.46 billion returned to shareholders under approved repurchase programs.
- As of year-end 2015, the company had a strong liquidity position with $128.8 million in cash and cash equivalents and $1.04 billion available under its credit facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Quanta Services kept $0.04.
- Revenue$7.57B100.0%
- Cost of revenue−$6.65B87.8%
- Gross profit$923.7M12.2%
- Operating costs−$686.2M9.1%
- Operating income$237.5M3.1%
- Interest, other & tax$73.4M1.0%
- Net income$310.9M4.1%
Where FY2015 revenue went
$7.57B- Cost of revenue: $6.65B, 88% of revenue
- Operating income: $237.5M, 3.1% of revenue
- SG&A: $592.9M, 7.8% of revenue
- Other operating costs: $93.3M, 1.2% of revenue
Kept 3.1% as operating incomeOperating income $237.5M · 3.1%Other operating costs $93.3M · 1.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 29, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $7.57B$7.75B | −2.3% |
| Gross Profit | $923.66M$1.17B | −21.0% |
| SG&A Expenses | $592.86M$705.48M | −16.0% |
| Operating Income | $237.50M$429.06M | −44.6% |
| Interest Expense | $8.02M$4.76M | +68.4% |
| Net Income | $310.91M$296.71M | +4.8% |
| EPS (Basic) | $1.59$1.35 | +17.8% |
| EPS (Diluted) | $1.59$1.35 | +17.8% |
| Shares Outstanding (Basic) | 195.11M219.67M | −11.2% |
| Shares Outstanding (Diluted) | 195.12M219.69M | −11.2% |
05—Questions
Frequently Asked Questions
What was Quanta Services' revenue performance in 2015, and what were the main drivers?
Quanta Services reported $7.57 billion in revenue for fiscal year 2015, a slight decrease of 2.3% compared to 2014. The Electric Power Infrastructure Services segment saw a 6.9% revenue decrease, mainly due to reduced customer spending and project delays linked to regulatory and permitting issues in large transmission projects. The Oil and Gas Infrastructure Services segment, however, experienced a 7.8% revenue increase, largely due to contributions from recent acquisitions, which helped offset declines in demand related to lower oil prices.
How did the company's profitability and margins fare in 2015?
Profitability and margins declined in 2015. Gross profit decreased by 21% to $923.7 million, and the gross profit margin fell to 12.2% from 15.1% in 2014. This was attributed to a less favorable revenue mix, with a higher proportion of work from lower-margin services and specific project losses. Additionally, the company recorded $58.5 million in asset impairment charges, primarily goodwill and intangible assets in the Oil and Gas segment, reflecting the impact of sustained low commodity prices.
What significant corporate actions or strategic moves did Quanta Services undertake in 2015?
In 2015, Quanta Services completed 11 acquisitions to bolster its service offerings in both the Electric Power and Oil and Gas sectors. A major strategic divestiture was the sale of its fiber optic licensing operations for $1 billion, which resulted in a significant after-tax gain of $171 million. The company also continued its capital return strategy, repurchasing approximately $1.46 billion of its common stock.
06—Continue