Summary
Quanta Services, Inc. (PWR) reported a significant increase in revenue for the second quarter and first six months of 2011 compared to the prior year, driven primarily by a surge in Electric Power Infrastructure Services. This growth was bolstered by increased customer capital spending and the contribution of the Valard acquisition. However, this top-line growth was accompanied by a notable decline in gross profit and operating income, particularly due to challenges in the Natural Gas and Pipeline Infrastructure Services segment and lower margins in Electric Power Services. The company's backlog saw a substantial decrease from December 31, 2010, to June 30, 2011, indicating a shift in project pipelines. Despite revenue growth, a significant drop in operating margin, especially in the Natural Gas segment which posted an operating loss, presents a key concern for investors. The company is actively managing its cash position and recently amended its credit facility to provide greater financial flexibility.
Financial Highlights
50 data points| Revenue | $904.78M |
| Gross Profit | $140.79M |
| SG&A Expenses | $89.49M |
| Operating Income | $57.73M |
| Interest Expense | $255K |
| Net Income | $31.80M |
| EPS (Basic) | $0.15 |
| EPS (Diluted) | $0.15 |
| Shares Outstanding (Basic) | 214.83M |
| Shares Outstanding (Diluted) | 215.02M |
Key Highlights
- 1Total revenues increased by 16.1% to $1.01 billion for the three months ended June 30, 2011, and by 14.9% to $1.86 billion for the six months ended June 30, 2011, compared to the prior year periods.
- 2Electric Power Infrastructure Services segment revenue surged by 44.0% ($203.7 million) for the quarter and 34.1% ($313.4 million) for the six months, largely driven by increased customer capital spending and the Valard acquisition.
- 3Gross profit decreased by 1.2% to $154.1 million for the quarter and by 21.1% to $225.0 million for the six months, with gross margin declining to 15.2% and 12.1% respectively, from 17.9% and 17.6% in the prior year.
- 4The Natural Gas and Pipeline Infrastructure Services segment experienced a revenue decrease of 20.3% ($53.5 million) for the quarter and 14.5% ($65.6 million) for the six months, shifting to an operating loss of $1.2 million for the quarter and a loss of $38.2 million for the six months.
- 5Total backlog significantly decreased to $3.17 billion as of June 30, 2011, from $6.90 billion as of December 31, 2010, with a particularly sharp drop in the Electric Power segment backlog.
- 6The company reported a net income attributable to common stock of $31.8 million for the quarter and $14.2 million for the six months, down from $33.0 million and $56.7 million, respectively, in the prior year periods.
- 7Quanta Services amended its credit facility on August 2, 2011, increasing it to $700 million and extending the maturity to August 2, 2016, providing enhanced financial flexibility.