Quanta Services, Inc. Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Quanta reported solid Q1 2020 results despite early COVID-19 disruptions late in the quarter.
  • Backlog remains near record levels at $14.7 billion, up $2 billion from Q1 2019.
  • COVID-19 and energy market challenges are expected to make Q2 the most difficult quarter of 2020, with improvement expected in the second half.
  • Management reaffirmed long-term confidence in its multi-year growth strategy and resilient utility, communications, and gas distribution businesses.

Q1 2020 Financial Highlights (compared to Q1 2019 where noted)

  • Revenue: $2.8 billion (Electric Power +8% excluding Latin America; Communications +40%).
  • Net income: $39 million or $0.26 per diluted share.
  • Adjusted diluted EPS: $0.47.
  • Free cash flow: $164 million (included $82 million in insurance proceeds).
  • Backlog: $14.7 billion (vs $12.7 billion in Q1 2019).
  • DSO: 85 days (down 3 days versus Q1 2019).

Segment Performance

Electric Power Segment
  • Revenue: $1.8 billion, up 8% year-over-year (excluding Latin America).
  • Margins: 7.3%, or 8.2% excluding Latin America, consistent with seasonal expectations.
  • Communications services strong: +40% revenue, mid‑single‑digit margins.
  • Utility customer CapEx remains intact; no meaningful budget reductions.

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Operator: Greetings. And welcome to Quanta Services First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions]. Please note, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Kip Rupp, Vice President of Investor Relations. Thank you, sir. You may begin. Kip Rupp: Thank you and welcome everyone to the Quanta Services first quarter 2020 earnings conference call. This morning, we issued a press release announcing our first quarter results which can be found in the Investor Relations section of our website at quantaservices.com, along with a summary of our 2020 outlook and commentary we will discuss this morning. Additionally, we will use a slide presentation this morning to accompany our prepared remarks, which is viewable through the call's webcast and is also available on the Investor Relations section of the Quanta Services website. Please remember that information reported on this call speaks only as of today, May 7, 2020, and therefore, you're advised that any time-sensitive information may no longer be accurate as of any replay of this call. This call will include forward-looking statements intended to qualify under the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. These include all statements reflecting Quanta's expectations, intentions

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