Quanta Services, Inc. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Quanta reported solid Q2 2020 results despite COVID-19 disruptions and energy market challenges.
  • Electric Power segment margins were exceptional, driven by strong execution and cost management.
  • Pipeline & Industrial (P&I) segment margins outperformed expectations even with significant revenue declines.
  • Cash flow was robust, and liquidity remained strong with debt-to-EBITDA at 1.3x.
  • The company highlighted its transformative 15-year LUMA Energy contract in Puerto Rico.

Key Financial Results (Q2 2020 vs. Q2 2019)

  • Total revenue: $2.5B (decline due to P&I segment weakness).
  • Net income: $74M, or $0.52 per diluted share.
  • Adjusted diluted EPS: $0.74.
  • Electric Power segment revenue: $1.8B (+2% YoY).
  • Electric Power segment margin: 10.3%; excluding Latin America, 11.1% (+130 bps YoY from 9.8%).
  • Communications revenues +50% YoY.
  • P&I segment revenue: $713M (‑35% YoY).
  • P&I segment margin: 3% (down YoY but above expectations).
  • Free cash flow: $457M for the quarter.
  • Backlog: $13.9B (+9% YoY).
  • 12-month backlog: $7.7B (slightly up YoY).

Operational and Segment Commentary

Electric Power Segment

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Operator: Greetings. Welcome to Quanta Services Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. At this time, I’ll turn the conference over to Kip Rupp, Vice President, Investor Relations. Mr. Rupp, you may now begin. Kip Rupp: Great. Thank you, and welcome, everyone, to the quanta services second quarter 2020 earnings conference call. This morning, we issued a press release announcing our second 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 that 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, August 6, 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, a

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