Dycom Gears Up to Report Q2 Earnings: What's in Store?

Dycom Industries, Inc. DY is scheduled to report second-quarter fiscal 2025 (ended on Jul 27, 2024) results on Aug 21, before the opening bell.

In the last reported quarter, the company's earnings beat the Zacks Consensus Estimate by 52.5% and increased 22.5% from a year ago. Contract revenues increased 9.3% year over year and topped the consensus mark by 4.8%.

This specialty contracting services provider surpassed earnings estimates in three of the trailing four quarters, with an average of 30.2%.

Earnings & Revenue Expectations

The Zacks Consensus Estimate for Dycom's fiscal second-quarter earnings per share has moved up to $2.18 from $2.15 in the past 60 days. The estimated figure indicates a 7.4% increase on a year-over-year basis.

Factors to Note

Dycom's revenues and EPS are expected to have increased in the to-be-reported quarter, given the strong contribution from the Bigham acquisition. DY is banking on increased demand for network bandwidth and mobile broadband, an extended geographic reach, proficient program management and network planning services. Moreover, improving demand trends among DY's top five customers and all other customers are likely to have contributed to the top line.

For the fiscal second quarter, DY expects contract revenues to grow by high-single digits year over year. Additionally, it expects $70 million of acquired contract revenues for the quarter. The adjusted EBITDA margin is expected to increase 25-75 bps from the year-ago levels.

Our model predicts the fiscal second-quarter revenues in the Telecommunications segment (excluding Bigham acquisition) to be $994 million, indicating a rise of 7.2% from the prior-quarter figure. Revenues for the Underground Facility unit are pegged at $84.1 million, up 9.6% from the prior-quarter level. The consensus mark for Electrical and gas utilities and other business revenues is pegged at $41.4 million, indicating an increase of 9.9% year over year.

Our model projects an adjusted EBITDA margin of 13%, up from 12.6% reported a year ago.

For the fiscal second quarter, we expect a backlog of $6.54 billion, indicating an increase from $6.21 billion reported in the prior quarter.

However, challenges such as labor shortages and increased costs are expected to have exerted pressure on Dycom's quarterly performance. Fluctuations in oil prices pose a significant obstacle for DY, as higher fuel prices directly impact the cost of doing business.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Dycom this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.

Dycom currently has an Earnings ESP of 0.00%.

Presently, DY carries a Zacks Rank #2.

Recent Construction Releases

Martin Marietta Materials, Inc. MLM reported tepid results for second-quarter 2024, with earnings and revenues missing the Zacks Consensus Estimate. Both the top and bottom lines decreased on a year-over-year basis.

MLM witnessed historic precipitation in Texas and parts of the Midwest, along with ongoing restrictive monetary policy and curtailed volumes, thanks to April and May's historically wet weather. Owing to the slowing product demand in the interest-rate-sensitive private construction sector, the company lowered its full-year adjusted EBITDA guidance to $2.2 billion at the midpoint.

Vulcan Materials Company VMC reported dismal second-quarter 2024 results, with earnings and revenues missing their respective Zacks Consensus Estimate. On a year-over-year basis, earnings increased, but revenues declined due to lower Aggregate shipments.

For 2024, Vulcan now anticipates adjusted EBITDA in the range of $2.00-$2.15 billion, up from the prior projection of $2.15-$2.30 billion. This indicates a 3.2% improvement from 2023 levels, considering the mid-point of the guidance. Net earnings are now expected to be in the range of $0.95-$1.07 billion (up from the prior projection of $1.07-$1.19) versus $933 million in the prior year.

KBR, Inc. KBR reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.

KBR performed well across key metrics and expects this trend to continue for the rest of the year. Driven by robust performance in its core business, KBR raised its adjusted EBITDA and cash flow guidance for 2024.

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