Quanta Services reports 2012 third quarter results

HOUSTON, Oct. 31, 2012 /PRNewswire/ — Quanta Services, Inc. (NYSE: PWR) today announced results for the three and nine months ended Sept. 30, 2012.

Revenues in the third quarter of 2012 were $1.69 billion compared to revenues of $1.25 billion in the third quarter of 2011. Net income attributable to common stock was $96.4 million, or $0.45 per diluted share, in the third quarter of 2012, versus $52.0 million, or $0.25 per diluted share, in the third quarter of 2011.

Included in net income attributable to common stock for the third quarter of 2012 was $7.1 million of income, or a net benefit of $0.03 per diluted share, from the release of income tax contingencies. Adjusted diluted earnings per share (a non-GAAP measure) were $0.48 for the third quarter of 2012 compared to $0.29 in the third quarter of 2011. Adjusted diluted earnings per share are GAAP diluted earnings per share before the impact of the release of tax contingencies as well as non-cash items such as amortization of intangible assets and non-cash compensation expense, all net of tax, as shown in the detailed reconciliation in the attached table.

“Our strong results are indicative of sound execution and increasing demand for our services, as well as the confidence our customers continue to have in Quanta,” said Jim O’Neil, president and chief executive officer of Quanta Services. “Revenues from our electric power segment grew 32 percent in the third quarter and, as anticipated, the results of our natural gas and pipeline segment continued to improve despite an absence of large-diameter pipeline projects. We are focused on a solid finish to 2012 and looking forward to a strong 2013.”

Revenues for the nine months ended Sept. 30, 2012, were $4.63 billion compared to revenues of $3.11 billion in the nine months ended Sept. 30, 2011. For the first nine months of 2012, net income attributable to common stock was $207.6 million, or $0.98 per diluted share.  Included in net income attributable to common stock for the first nine months of 2012 are the previously discussed benefits from the release of income tax contingencies.  The 2012 results compare to net income attributable to common stock of $66.2 million, or $0.31 per diluted share, for the first nine months of last year.  Adjusted diluted earnings per share were $1.10 for the nine months ended Sept. 30, 2012, compared to $0.43 for the nine months ended Sept. 30, 2011. See the attached table for a reconciliation of non-GAAP measures to the reported GAAP measures.

RECENT HIGHLIGHTS

  • Secured Contract for Nation’s Longest Energized Transmission Line Reconductor – In September, Quanta announced that American Electric Power (AEP) selected the company to rebuild 66 miles of a 345-kilovolt power line near Corpus Christi, Texas. Quanta is performing this work in an energized state utilizing proprietary processes and equipment to avoid service outages to AEP’s customers during construction. This project is the first of five phases of energized transmission upgrades AEP has planned in the area, which are projected for completion by March 2016. Once completed, this first phase will represent the longest span of transmission line in the United States rebuilt in an energized state.
  • Selected for Eldorado-Ivanpah Transmission Project & Red Bluff Substation Project – In August, Quanta announced that Southern California Edison (SCE) selected PAR Electrical Contractors Inc. (PAR), a Quanta Services company, to install transmission infrastructure for SCE’s Eldorado-Ivanpah Transmission Project. Quanta’s scope of services for the project includes the replacement of a portion of an existing 115-kilovolt electric transmission line with 35 miles of double-circuit, 220-kilovolt electric transmission line. In addition, SCE selected PAR to construct its Red Bluff Substation Project in eastern Riverside County, Calif. Under the contract, PAR is also constructing the two transmission line segments associated with the substation.

OUTLOOK

The overall outlook for Quanta’s business is positive. However, the company’s customers continue to experience regulatory and permitting challenges on projects, and economic conditions continue to create uncertainty. It is difficult for management to predict the timing or extent of the impact that these issues may have on demand for Quanta’s services, particularly in the near-term. The following forward-looking statements are based on current expectations, and actual results may differ materially.

As a result of Quanta’s strong performance in the third quarter and improved visibility in the fourth quarter, the company is raising its financial forecast for the fourth quarter and full year of 2012. Quanta expects revenues for the fourth quarter of 2012 to range between $1.55 billion and $1.65 billion and diluted earnings per share to be $0.37 to $0.39. Included in our estimate of GAAP diluted earnings per share for the fourth quarter of 2012 is a net tax benefit of approximately $0.02 per share associated with certain tax contingency releases due to the expiration of certain statutes of limitations during the fourth quarter. Quanta expects adjusted diluted earnings per share (a non-GAAP measure) for the fourth quarter of 2012 to be $0.40 to $0.42. This non-GAAP measure is estimated on a similar basis as the calculations of historical adjusted diluted earnings per share presented in this press release. Amortization of intangibles and non-cash stock compensation expense are forecasted to be approximately $9.1 million and $6.9 million for the fourth quarter of 2012.

Quanta expects revenues for the full year 2012 to range between $6.2 billion and $6.3 billion. Diluted earnings per share for the full year 2012 are estimated to be between $1.35 and $1.37. Quanta expects adjusted diluted earnings per share for the full year 2012 to range from $1.50 to $1.52. Quanta’s previous full-year 2012 revenues, diluted earnings per share and adjusted diluted earnings per share forecast was $5.9 billion to $6.1 billion, $1.15 to $1.25 and $1.35 to $1.45.