Quanta Services Inc. (NYSE: PWR) announced results for the three months ended March 31, 2012. Revenues in the first quarter of 2012 were $1.43 billion compared to revenues of $849.0 million in the first quarter of 2011.
Net income attributable to common stock was $45.7 million, or $0.22 per diluted share, in the first quarter of 2012, versus a net loss attributable to common stock of $17.6 million, or a loss of $0.08 per diluted share, in the first quarter of 2011.
Adjusted diluted earnings per share (a non-GAAP measure) were $0.27 for the first quarter of 2012 compared to a loss of $0.05 for the first quarter of 2011. Adjusted diluted earnings per share are GAAP diluted earnings per share before the impact of non-cash items such as amortization of intangible assets and non-cash compensation expense, all net of tax. See the attached table for a reconciliation of non-GAAP measures to the reported GAAP measures.
"The first quarter of 2012 was the most profitable first quarter in the company’s history," said Jim O’Neil, president and chief executive officer of Quanta Services. “Our electric power segment was the major contributor to the strong first quarter performance, primarily due to safe, efficient execution on a record number of transmission projects. Based on our performance in this year’s first quarter, increased backlog, and improved visibility in the natural gas and pipeline segment, we have increased our full year 2012 guidance.”
Awarded Additional Pipeline Projects Totaling $170 Million - Since Quanta's last earnings conference call on February 22, 2012, the company has been awarded approximately $170 million of additional gathering system and pipeline construction projects, bringing year-to-date pipeline awards to approximately $370 million. The projects awarded thus far in 2012, some of which remain subject to final terms, call for Quanta to construct new pipelines and replace existing pipelines to facilitate the transportation of natural gas, natural gas liquids and oil to markets and processing facilities.
Secured Contract for California Solar Project - During the first quarter, Quanta was selected by GCL Solar Energy to provide comprehensive engineering, procurement and construction (EPC) services for two photovoltaic facilities totaling 70 megawatts. This project is located near the city of Alpaugh, California. Preconstruction activities began in February, and the project is expected to be completed by year end. Once completed, this will be one of the largest photovoltaic tracking facilities in the world.
Derrick A. Jensen to Become Chief Financial Officer - In April, Quanta announced that Derrick A. Jensen, currently senior vice president - finance and administration and chief accounting officer, will become chief financial officer on May 17, 2012. James H. Haddox, currently chief financial officer, will assume the role of executive vice president. Haddox will remain actively involved with the company, maintaining insurance, bonding and banking relationships and working with the executive team on strategic acquisitions, investments, international expansion and the long-term direction of the company.
Increased Investment in Howard Energy Partners (HEP) - In April, Quanta completed a $52.3 million additional investment in HEP, bringing Quanta's total investment in HEP to $87.3 million for a 31 percent equity interest in HEP.
HEP used the proceeds from Quanta and other investors to acquire key midstream gathering assets strategically located in the Eagle Ford shale.
The overall outlook for Quanta’s business is robust, resulting in improved expectations for the full year 2012. However, the company’s customers continue to experience regulatory and permitting challenges on projects and economic conditions continue to create some 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.
Quanta expects revenues for the second quarter of 2012 to range between $1.4 billion and $1.5 billion and diluted earnings per share to be $0.28 to $0.30. Quanta expects adjusted diluted earnings per share (a non-GAAP measure) for the second quarter of 2012 to be $0.33 to $0.35. This non-GAAP measure is estimated on a similar basis as the calculations of historical adjusted diluted earnings per share presented in this release, adjusting for amortization of intangibles and non-cash stock compensation expense, which are forecasted to be approximately $10 million and $7 million.
Quanta expects revenues for the full year 2012 to range between $5.4 billion and $5.7 billion. Diluted earnings per share for the full year 2012 are estimated to be between $1.00 and $1.20. Quanta expects adjusted diluted earnings per share for the full year 2012 to range from $1.19 to $1.39. Amortization of intangibles and non-cash stock compensation expense are forecasted to be approximately $64 million for the full year 2012.