Quanta Services Inc. PWR is slated to report third-quarter 2015 results on Nov 5.
Quanta Services posted a negative surprise of 6.15% over four consecutive quarters.
Let's see how things are shaping up for this announcement.
Factors to Consider
Quanta Services has been coming up with meek earnings results over the last few quarters mainly due to weak Electric Power Infrastructure segment performance. In its previously released third quarter 2015 preliminary results, the company has lowered its expectation for the to-be reported quarter owing to persisting operational problems.
Quanta Services is pessimistic due to the rising competition in small and medium scale electric transmission as well as delays in the company’s projects. Particularly, the company expects operating margin for the Oil and Gas Infrastructure Services segment to be negatively impacted by higher-than-expected expenses on two related projects along with postponement of a mainline pipe project, which will now move to construction after 2016. However, the company projects rise in revenues from other services to help it tide over.
Accordingly, for the third quarter of 2015, Quanta Services anticipates its earnings per share from continuing operations to be in the range of 22–24 cents – lower than the earlier guided band of 34–40 cents. Also, revenues for the quarter are projected to be below the midpoint of its formerly expected range of $1.9 billion – $2.0 billion.
Earnings Whispers?
Our proven model does not conclusively show that Quanta Services will beat earnings this season. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at a 25 cents. This leads to an earnings ESP of 0.00% for Quanta Services.
Zacks Rank: Quanta Services’ Zacks Rank #5 (Strong Sell) when combined with a 0.00% ESP lowers the predictive power of ESP and makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum. Note that stocks with a Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings.
Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Callon Petroleum Co. CPE has an Earnings ESP of +33.33% and carries a Zacks Rank #2.
Scorpio Tankers Inc. STNG has an Earnings ESP of +11.63% and carries a Zacks Rank #2.
Merrimack Pharmaceuticals, Inc. MACK has an Earnings ESP of +2.44% and carries a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment