Quanta Services Wins Contract - Analyst Blog

The Central Maine Power Company has awarded a contract to Quanta Services Inc. (PWR) for construction and installation of approximately 200 miles of transmission infrastructure in central and western Maine. The contract is part of CMP's $1.54 billion program to revolutionize the country's bulk power system and address certain economic and environmental issues of electricity customers.  

Quanta intends to work in conjunction with a Maine-based contractor to provide comprehensive transmission network building, including foundations, right-of-way construction, structural and conductor installation.

The company is one of the few network service providers capable of regularly delivering complete solutions on a nationwide basis. As companies in the electric power, gas, telecommunications and cable television industries continue to search for service providers who can effectively design, install and maintain their networks, Quanta Services believes that its service, industrial and geographic reach assists it strongly to meet these needs.

Its electric power customers benefit from its ability to perform services without interrupting power service to their customers, which is referred to as energized services. It holds a U.S. patent protecting its exclusive use of the LineMaster robotic arm through 2014, which enhances the ability to deliver these energized services to its customers.

It also holds certain international patents for the LineMaster and U.S. and international patents protecting other robotic arm technologies for various periods up to 2024, as well as U.S. and international pending patent applications for certain energized methodologies. It believes that delivery of energized services is a significant factor in differentiating itself from competition.

The industry is served by numerous small, owner-operated private companies, some public companies and several large regional companies. Relatively few barriers prevent entry into some of the industries. As a result, any organization, which is financially resourceful and has access to technical expertise is a competitor. Competition in the industry depends on a number of factors, one being price. Certain competitors may have lower overhead cost structures and, therefore, may be able to provide their services at lower rates.

Quanta Services Inc. is a leading national provider of specialty contracting services, and is one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry. EMCOR Group Inc (EME) is a major competitor.

We currently have an Underperform recommendation on Quanta Services.

 
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