Quanta Services, Inc. (NYSE:PWR) Q1 2018 Earnings Conference Call - Final Transcript

May 03, 2018 • 09:00 am ET

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Quanta Services, Inc. (NYSE:PWR) Q1 2018 Earnings Conference Call - Final Transcript

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Presentation
Executive
Derrick Jensen

segment are unchanged from our year-end guidance discussion. We continue to see the possibility for segment revenues to grow 10% relative to 2017, the high-end of the range. We expect revenues and margins will improve in the second and third quarters, followed by a seasonal decline in the fourth quarter. We anticipate Oil and Gas segment operating margins between 5.7% and 6.7% for the year.

We anticipate interest expense for the year to be approximately $31 million, due to slightly higher debt levels, partially attributable to share repurchase activity in the first quarter, as well as higher working capital requirements during the year to support increased revenue levels. As we have previously discussed, our other expense line item includes the deferral of a portion of the profit from construction activity on projects in which we have investments, primarily due to better than expected production on certain of those projects, we now expect the other expense line item to range between $30 million and $40 million for the year.

We are projecting our effective tax rate for 2018 to be between 29% and 29.5% for the year. These operating ranges result in net income between $321 million and $383 million and adjusted EBITDA between $815 million and $917 million for the full year of 2018. Due to the share repurchase activity in the first quarter, we are now assuming around 155 million weighted average shares outstanding for the year.

We are increasing our range of GAAP diluted earnings per share attributable to common stock for the year to be between $2.07 and $2.47, and anticipate non-GAAP adjusted diluted earnings per share to be between $2.55 and $2.95. This increase in our annual guidance is partly associated with our first quarter performance, but also due to the strengthening view of the third and fourth quarters for our Electric Power segment.

Our forecasted non-GAAP measures are estimated on a basis similar to the calculations of historical adjusted diluted earnings per share presented in our release, and please review the outlook expectation summary on our website for additional details. We believe our expected results for the year continue to reflect our opportunities for growth and our commitment to maintaining our strong balance sheet and financial flexibility. We feel we are operationally and financially well positioned and continue to focus on our ability to execute on strategic initiatives.

This concludes our formal presentation, and we will now open the line for Q&A. Operator?