Quanta Services, Inc. PWR is scheduled to report fourth-quarter 2024 results on Feb. 20, before the opening bell.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

In the last reported quarter, the adjusted earnings topped the Zacks Consensus Estimate by 2.3% and grew 21.4% year over year. Revenues marginally missed the consensus mark by 0.9% but increased 15.5% year over year.

PWR’s earnings topped the consensus mark in three of the trailing four quarters and missed on the remaining occasion, with an average surprise of 4%.

PWR’s Trend in Estimate Revision

The Zacks Consensus Estimate for the quarter’s adjusted earnings per share (EPS) has remained unchanged at $2.64 over the past 60 days. The estimated figure indicates 29.4% growth from the year-ago EPS of $2.04.

The consensus mark for revenues is pegged at $6.63 billion, implying 14.7% year-over-year growth.

Factors Likely to Have Shaped Quanta’s Q4 Performance

Revenues

The company’s fourth-quarter top line is expected to have increased year over year, on the back of strong demand trends for its diversified service offerings. The multi-year initiatives aimed at modernizing utility infrastructure, and expanding renewable energy generation and transmission infrastructure are expected to have been driving the uptrend.

The notable increases in power demand in the United States, driven by the adoption of new technologies and related infrastructure including Artificial Intelligence and data centers accompanied by federal and state policies designed to accelerate the energy transition, are also likely to have bode well. Underscoring these tailwinds, two of the three reporting segments of Quanta are likely to have supported the quarter’s performance.

Segment-wise, our model expects the revenues from the Electric Power Infrastructure Solutions (accounted for 45.9% of total revenues in third-quarter 2024) segment and the Renewable Energy Infrastructure Solutions (accounted for 34.7% of total revenues in the third quarter) segment to increase year over year by 34.5% to $3.3 billion and 8.8% to $2.21 billion, respectively.

However, headwinds in the form of lower contributions from large pipeline projects are likely to have subdued the performance of the Underground Utility and Infrastructure Solutions (accounted for 19.4% of total revenues in the third quarter) segment. We project the revenues from this segment to decline 17.3% year over year to $1.08 billion in the fourth quarter.

Notably, Quanta’s inorganic initiatives, along with its focus on the growth strategy, are also likely to have aided its quarterly performance, positioning it well for the upcoming quarters.

Margins

Although the company has been facing headwinds in the form of inflated labor costs, project delays and supply inefficiencies, leverage from the increased top line, growing backlog and efficient project deliveries are likely to have aided its bottom line during the fourth quarter. Also, variability in project timing adds to the tailwinds favoring the margins during the quarter.

Per our model, the operating margins in the Electric Power Infrastructure Solutions and Renewable Energy Infrastructure Solutions segments are expected to expand year over year by 60 basis points to 11.1% and 210 bps to 11%, respectively. On the other hand, we expect the operating margin in the Underground Utility and Infrastructure Solutions segment to contract to 5.7% from 6.6% reported in the year-ago quarter.

What the Zacks Model Predicts for PWR

Our proven model does not conclusively predict an earnings beat for Quanta this time around. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.

Earnings ESP: PWR has an Earnings ESP of -1.05%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are some companies in the Zacks Construction sector, which per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

Frontdoor, Inc. FTDR currently has an Earnings ESP of +60.00% and a Zacks Rank of 1.

FTDR’s earnings for the fourth quarter of 2024 are expected to decline 45%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 269%.

Dycom Industries, Inc. DY currently has an Earnings ESP of +4.97% and a Zacks Rank of 2.

DY’s earnings for the fourth quarter of fiscal 2024 are expected to increase 15.2%. The company reported better-than-expected earnings in three of the last four quarters and missed on the remaining one occasion, the average surprise being 16.6%.

Trex Company, Inc. TREX has an Earnings ESP of +20.00% and a Zacks Rank of 2.

TREX reported better-than-expected earnings in each of the last four quarters, the average surprise being 9%. The company’s earnings for the fourth quarter of 2024 are expected to decrease 75%.

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