October 29, 2020
Quanta Services Reports Third Quarter 2020 Results
Quanta Services, Inc. (NYSE: PWR) today announced results for the three and nine months ended September 30, 2020.
Revenues in the third quarter of 2020 were $3.02 billion compared to revenues of $3.35 billion in the third quarter of 2019, and net income attributable to common stock was $162.9 million, or $1.13 per diluted share, in the third quarter of 2020 compared to net income attributable to common stock of $136.1 million, or $0.92 per diluted share, in the third quarter of 2019. Adjusted diluted earnings per share attributable to common stock (a non-GAAP measure) was $1.40 for the third quarter of 2020 compared to $1.14 for the third quarter of 2019.
“Quanta’s third quarter results exceeded our expectations, driven by strong margins from both our Electric Power Infrastructure and Pipeline and Industrial Infrastructure Services segments. Electric Power Infrastructure Services segment revenue was a quarterly record, produced by solid and safe execution, high utilization and record levels of emergency response activity,” said Duke Austin, President and Chief Executive Officer of Quanta Services. “Due to our strong third quarter results, healthy end market drivers and the addition of recent acquisitions, we are increasing our full-year 2020 net income, EBITDA and earnings per share expectations.
“We believe Quanta has executed well this year despite challenges from the global pandemic due to the resiliency of our business, the strengths of our strategies and the operational excellence of our people. We continue to believe there is opportunity to drive multi-year revenue and earnings growth by focusing on our base business, supporting the long-term programmatic spend of utilities and participating in the development of infrastructure that supports renewables and technology deployments such as 5G and electric vehicles. We believe these dynamics, along with the contribution of earnings from our investment in LUMA Energy in Puerto Rico and our continued opportunistic deployment of capital, support our expectations for profitable growth in 2021 and beyond.
“Lastly, during the third quarter Quanta issued $1.0 billion of 2.9% senior notes due 2030, expanded the capacity and extended the term of our credit facility and received an investment grade corporate credit rating. We are proud of these achievements, which we believe points to our strong financial profile, the resiliency and sustainability of our business model and a positive multi-year outlook.”
Certain items that impacted the third quarter of 2020 results are reflected as adjustments in the calculation of Quanta’s adjusted diluted earnings per share attributable to common stock and are further described in the non-GAAP reconciliation of adjusted diluted earnings per share attributable to common stock to GAAP diluted earnings per share attributable to common stock in the accompanying table. Quanta completed five acquisitions during the first nine months of 2020 and seven acquisitions during the full year 2019. Therefore, Quanta’s results include the results of the acquired businesses from their respective acquisition dates. For further information on the items that impacted comparability of 2020 and 2019, see the footnotes to the Supplemental Segment Data table and the non-GAAP reconciliations of adjusted EBITDA and adjusted diluted earnings per share attributable to common stock in the accompanying tables.
- Signed Contract for the New England Clean Energy Connect Transmission Project – In October 2020, Quanta entered into a contract to construct the New England Clean Energy Connect Transmission Project. Quanta’s scope of work for the project includes the construction of approximately 145 miles of new, high-voltage direct current transmission line from the Canadian border to a substation in Lewiston, Maine, which is designed to deliver renewable hydropower to the New England energy grid. Quanta expects work to begin on the project during the fourth quarter of 2020 and anticipates completing the project in the first quarter of 2023.
- Completed Three Strategic Acquisitions During the Third Quarter – In August 2020, Quanta completed the acquisition of a utility contractor that provides electric power distribution, transmission and substation maintenance and construction services, primarily in the southeastern and Mid-Atlantic regions of the United States. In September 2020, Quanta completed the acquisition of a communications contractor that primarily serves the Mountain West region of the United States and specializes in the deployment of short- and long-haul fiber optic cable and utilities and the engineering and design of small and large scale projects. As previously disclosed in Quanta’s second quarter 2020 earnings release, in July 2020, Quanta completed the strategic acquisition of a leading professional engineering firm based in Chicago, IL, that provides infrastructure engineering and design services to electric utilities, gas utilities and communications services companies, as well as permitting and utility locating services.
- Closed Senior Notes Offering and Amendment to Bank Credit Agreement – In September 2020, Quanta issued $1.0 billion aggregate principal amount of its 2.900% Senior Notes due 2030, receiving proceeds of approximately $986.7 million after deducting the original issue discount, underwriter discounts and offering expenses. These proceeds, together with cash on hand, were used to prepay, in full, $1.21 billion of outstanding term loans under Quanta’s senior credit facility. Additionally, Quanta amended its senior credit facility to, among other things, increase the aggregate revolving commitments from $2.14 billion to $2.51 billion and extend the maturity date from October 2022 to September 2025.