HomeMost PopularInvestingPrimoris (PRIM) Q1 Earnings & Revenues Top, Up Y/Y, Stock Rise

Primoris (PRIM) Q1 Earnings & Revenues Top, Up Y/Y, Stock Rise

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Primoris Services Corporation PRIM reported stellar earnings for the first quarter of 2024. Its earnings significantly surpassed the Zacks Consensus Estimate and increased year over year.

Revenues also increased from the previous year. The company has been witnessing growing demand for Energy and Utilities services, thanks to progress being seen in the energy transition and infrastructure modernization of North America. Its solar and industrial businesses are also capitalizing on opportunities to help meet the growing demand for power generation, while the power delivery business supports the increased need for transmission and distribution services.

Following the results, shares of PRIM rose 5.5%, during the trading session on May 8.

Tom McCormick, president and chief executive officer of Primoris, said, β€œWe maintain a strong backlog of work and expect to see new project awards accelerate in the coming quarters to further build our backlog and support revenue growth.”

Earnings, Revenue & Backlog Discussion

The company reported adjusted earnings per share (EPS) of 47 cents, handily surpassing the Zacks Consensus Estimate of 8 cents by 487.5%. The metric increased a whopping 161.1% from the year-ago quarter’s figure of 18 cents per share.

Primoris Services Corporation Price, Consensus and EPS Surprise

Primoris Services Corporation Price, Consensus and EPS Surprise

Primoris Services Corporation price-consensus-eps-surprise-chart | Primoris Services Corporation Quote

Revenues of $1.41 billion increased 12.4% year over year, driven by strong growth in utility-scale solar and industrial construction within the Energy segment partially offset by lower Utilities segment activity.

Total backlog of $10.6 billion was down from the 2023-end backlog of $10.9 billion, including the total Master Service Agreements (β€œMSA”) backlog of $5.8 billion (up from $5.7 billion reported at 2023-end).

Segment Details

Utilities: This segment’s revenues decreased 9% year over year to $490.8 million due to a decline in project work in power delivery and lower communications activity. Gross margin also decreased slightly to 6% during the reported period from 6.2% a year ago.

Total backlog was $5.34 billion, up from the fourth quarter of 2023 level of $5.19 billion. A 12-month backlog totaled $1.8 billion versus $1.9 billion at 2023-end.

Energy: This segment’s revenues rose 33.4% from the year-ago quarter to $989 million on the back of higher solar project activity and industrial construction activity in the western United States, partially offset by lower pipeline activity. Gross margin expanded to 10.5% from 8.9% reported a year ago.

Total backlog of $5.3 billion was down from $5.7 billion at 2023-end. A 12-month backlog totaled $2.8 billion versus $2.91 billion at 2023-end.

Operating Highlights

The gross margin expanded to 9.4% year over year from 7.9% in the quarter, backed by improved contributions from the renewables and industrials businesses, partially offset by a decrease in project work in the Utilities segment.

Selling, general and administrative (SG&A) expenses increased 13.6% from the previous year, primarily due to high personnel costs to support revenue growth. SG&A expenses, as a percentage of revenues, were 6.3%, roughly flat year over year.

Adjusted EBITDA in the quarter increased 39.6% to $73.8 million year over year.

Liquidity & Cash Flow

As of Mar 31, 2024, PRIM had cash and cash equivalents of $177.6 million compared with $217.8 million at 2023-end. Total long-term debt, net of current portion, totaled $862.2 million compared with the 2023-end level of $885.4 million.

In the reported quarter, net cash used in operating activities was $28.5 million versus $115.3 million in the year-ago period.

As of Mar 31, 2024, the company had $25 million remaining for purchase under the share purchase program, which expires on Dec 31.

2024 Outlook

The company expects adjusted EPS within $3.05-$3.25 and adjusted EBITDA in the range of $395-$415 million. SG&A expenses, as a percentage of revenues, are projected in the low 6% range for the full year.

PRIM targets gross margins in the range of 9-11% in Utilities and 10-12% in Energy.

Zacks Rank & Recent Construction Releases

Primoris currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Owens Corning OC reported impressive results in first-quarter 2024, with earnings and net sales surpassing the Zacks Consensus Estimate.

Earnings increased on a year-over-year basis despite a net sales decline. Sales declined due to lower sales volumes in the Insulation and Composites segments.

Masco Corporation MAS reported mixed results for first-quarter 2024, wherein earnings surpassed the Zacks Consensus Estimate, but net sales lagged the same. On a year-over-year basis earnings increased despite net sales decline. Strong operational efficiency helped it deliver solid earnings.

Masco’s focus on a balanced capital deployment strategy helped it return $212 million to shareholders via dividends and share repurchases.

Otis Worldwide Corporation OTIS reported mixed results in first-quarter 2024, wherein its earnings surpassed the Zacks Consensus Estimate but net sales missed the same. The top and bottom lines grew on a year-over-year basis.

Its quarterly results reflected 14 consecutive quarters of organic sales growth and the results were marked by a high-teens growth in adjusted EPS. Thanks to the strength in modernization, the company witnessed orders growth of more than 10%, leading to mid-teens backlog growth.

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