For the first quarter of 2009, cash earnings per diluted share (a non-GAAP measure) were $0.14 as compared to cash earnings per diluted share of $0.18 in the year-ago quarter. Cash earnings per diluted share are GAAP earnings per diluted share before amortization of intangible assets, non-cash interest expense and non-cash compensation expense, all net of tax.
“Electric transmission and renewable energy projects are the growth engines that will allow us to thrive throughout a challenging economic environment for the next several months,” said John R. Colson, chairman and chief executive officer of Quanta Services, Inc. “We are optimistic that the second half of 2009 will see increased spending by our customers and, because of our higher total backlog, the beginning of a full recovery and growth in our markets in 2010 and beyond.”
Recent Highlights:
— Secured CREZ Award from LCRA – In April 2009, the Lower Colorado River Authority (LCRA) board approved an addendum estimated at $256 million to the existing contract with Irby Construction, a Quanta Services subsidiary, which was signed in the first quarter of 2008. This brings the total estimated contract value to $450 million through October 2013. The addendum will cover additional transmission services to be performed by Quanta Services to support LCRA’s current and planned infrastructure in the Texas competitive renewable energy zone (CREZ). Under the current contract, Quanta Services is providing transmission line services such as right-of-way preparation, structural foundations, structure installation, conductor stringing and energizing of new transmission lines as well as the reconstruction of existing transmission lines
— Initiated smart meter installation for CenterPoint Energy and Itron – In the first quarter of 2009, Quanta Services initiated work under a contract with CenterPoint Energy, Inc.’s transmission and distribution utility and Itron Incorporated to install 2.4 million smart electric meters and related communications devices throughout the utility’s 5,000 square-mile Houston area. This installation spans five years and is part of CenterPoint Energy’s Advanced Metering System
— Energized Services to Improve South African Power Reliability – Quanta Services will support efforts to improve power reliability in South Africa through deployment of its energized reconductoring services. Over a twelve-month period, Quanta Services Energized Services crews will replace certain existing transmission conductors with high temperature conductors to significantly increase the capacity and improve the reliability of the existing transmission infrastructure serving the greater Johannesburg area
— Finalized Contract with National Grid – In the first quarter of 2009, Quanta Services finalized its contract with National Grid to provide engineering and installation services throughout the New England region. Under the five-year contract, transmission and substation infrastructure services will be performed by New Energy Alliance (NEA), a joint venture between Quanta Services and Balfour Beatty Infrastructure, Inc. NEA is currently performing preliminary services with construction expected to begin in the third quarter of this year
The contract is part of National Grid’s investment of up to $1.7 billion over five years in its power transmission system in New York and New England.
Outlook:
Quanta Services recognizes that the company and its customers continue to operate in a challenging business environment with an economic downturn and weak capital markets. Therefore, management cannot predict the timing or extent of the impact these conditions may have on demand for Quanta Services’ services, particularly in the near term.
Quanta Services expects revenues for the second quarter of 2009 to range between $850 million and $890 million and diluted earnings per share to be between $0.14 and $0.15. Quanta Services expects cash earnings per diluted share (a non-GAAP measure) for the second quarter of 2009 to range from $0.17 to $0.18. Amortization of intangibles, noncash stock compensation expense and non-cash interest expense are forecasted to be about $11.2 million for the second quarter of 2009.
