Quanta Services Posts Surprise 1Q Loss On Permit Delays
Date : 05/04/2011 @ 7:01AM
Source : Dow Jones News
Stock : Quanta Services Inc. (PWR)
Quote : 19.735 -1.695 (-7.91%) @ 11:44AM
Quanta Services Posts Surprise 1Q Loss On Permit Delays; $19 STOX TODAY.. Almost 52 weeks low!
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DOW JONES NEWSWIRES
Quanta Services Inc. (PWR) swung to a surprise first-quarter loss as delays in securing government permits cut into revenue amid higher operating costs.
The company cut its full-year earnings guidance to between 65 cents and 80 cents, down from its February view of 80 cents to 90 cents.
For the second quarter, the company said it expects an adjusted per-share profit of 18 cents to 20 cents on revenue of $925 million to $975 million. Analysts polled by Thomson Reuters most recently expected 21 cents and $999 million.
Quanta, which installs and maintains networks for electric power, gas and telephone companies, had posted higher revenue in past quarters on strength in its electric power and pipeline units, but slumping margin has been dragging down the bottom line.
Chairman and Chief Executive John R. Colson said adverse weather conditions and government permitting delays on four major projects hit operations in the first quarter.
"We are currently negotiating change orders and claims exceeding $60 million in response to these and other circumstances," Colson said. "Although none of these change orders or claims were reflected in our first quarter results, we expect positive contributions to future earnings as these negotiations progress."
Quanta said in March its chief operating officer, James F. O'Neil III, will succeed Colson later this month.
The company reported a first-quarter loss of $17.6 million, or 8 cents a share, compared with a prior-year profit of $23.7 million, or 11 cents a share. Shares outstanding grew 2.6%. Excluding stock-based compensation, amortization charges and other items, the loss was 5 cents, down from a prior-year profit of 15 cents. In February, the company projected a per-share profit between 2 cents and 3 cents, well behind analysts' views at the time.
Revenue increased 13% to $849 million, beating the $802 million average estimate from analysts polled by Thomson Reuters.
Gross margin slumped to 8.4% from 17.3% as services costs, including depreciation expenses, jumped 26%.
Twelve-month backlog on March 31 stood at $2.96 billion, up from $2.87 billion on Dec. 31. Total backlog was $6.56 billion, up from $6.32 billion.
Earnings in the electric-power segment, Quanta's largest, dropped 21%, while the natural gas and pipeline business swung to a loss.
Quanta shares closed at $21.43 Tuesday and were inactive premarket. The stock has fallen 9.2% over the past three months.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com
