Quanta Services' CEO Discusses Q1 2012 Results - Earnings Call Transcript

Quanta Services (PWR)

Q1 2012 Earnings Call

May 03, 2012 9:30 am ET

Executives

Kip A. Rupp - Founder and Managing Partner

James F. O'Neil - Chief Executive Officer, President and Director

James H. Haddox - Chief Financial Officer

Analysts

Tahira Afzal - KeyBanc Capital Markets Inc., Research Division

Will Gabrielski - Lazard Capital Markets LLC, Research Division

Rodney C. Clayton - JP Morgan Chase & Co, Research Division

Andrew Buscaglia

Alexander J. Rygiel - FBR Capital Markets & Co., Research Division

Jeffrey L. Beach - Stifel, Nicolaus & Co., Inc., Research Division

Zach Larkin - Stephens Inc., Research Division

Adam R. Thalhimer - BB&T Capital Markets, Research Division

Ahmar M. Zaman - Piper Jaffray Companies, Research Division

Joseph Ritchie - Goldman Sachs Group Inc., Research Division

William D. Bremer - Maxim Group LLC, Research Division

Justin P. Hauke - Robert W. Baird & Co. Incorporated, Research Division

Craig E. Irwin - Wedbush Securities Inc., Research Division

Daniel J. Mannes - Avondale Partners, LLC, Research Division

Presentation

Operator

Good morning, ladies and gentlemen, and thank you for standing by, and welcome to the Quanta Services First Quarter 2012 Earnings Call. [Operator Instructions] And as a reminder, this call is being recorded today, May 3, 2012. I would now like to turn the conference over to Kip Rupp, VP of Investor Relations. Please go ahead.

Kip A. Rupp

Great. Thank you, Craig, and welcome, everyone, to the Quanta Services conference call to review first quarter 2012 results.

Before I turn the call over to management, I have the normal housekeeping details to run through. If you would like to have Quanta news releases and other information e-mailed to you when they occur, please sign up for the e-mail information alerts by going to the Investors & Media section of Quanta Services' website at quantaservices.com.

A replay of today's call will be available on Quanta's website at quantaservices.com. In addition, a telephonic recorded instant replay will be available for the next 7 days, 24 hours a day. That can be accessed as set forth in the press release. Please remember that information reported on this call speaks only as of today, May 3, 2012, and therefore, you're advised that any time-sensitive information may no longer be accurate as of the time of any replay of this call.

This conference call will include forward-looking statements intended to qualify under the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include all statements reflecting Quanta's expectations, intentions, assumptions or beliefs about future events or performance or that do not solely relate to historical or current facts.

Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict or are beyond Quanta's control, and actual results may differ materially from those expected or implied as forward-looking statement. Management cautions that you should not place undue reliance on Quanta's forward-looking statements, and Quanta does not undertake any obligation to update any forward-looking statements to reflect events or circumstances after this call.

For additional information concerning some of the risks, uncertainties and assumptions that could affect Quanta's forward-looking statements, please refer to the company's annual report on Form 10-K for the year ended December 31, 2011; its quarterly reports on Form 10-Q; and its other documents filed with the Securities and Exchange Commission, which may be obtained on Quanta's website or through the SEC's website at sec.gov.

With that, I would like to now turn the call over to Mr. Jim O'Neil, Quanta's President and CEO. Jim?

James F. O'Neil

Thanks, Kipp. Good morning, everyone, and welcome to the Quanta Services First Quarter 2012 Earnings Conference Call. I will start the call with an operational overview before turning the call over to James Haddox, Quanta's CFO, to provide a detailed review of our first quarter financial results. Following James' comments, we will welcome your questions.

Our first quarter results reflect continued solid execution by our operations and robust demand for our services. Our revenues in the first quarter grew 68% compared to the first quarter of 2011, and our GAAP diluted earnings per share of $0.22 represents a $63.3 million net income improvement over the same quarter last year. Both our 12 month and total backlog increased at the end of the first quarter compared to the end of the same quarter in 2011. 12-month backlog increased about 37% and total backlog increased almost 12% compared to the backlog at the end of the first quarter of 2011.

Our first quarter results were driven by strong performance in our Electric Power segment, due to the number of electric transmission projects in construction and our ability to safely execute on these projects. Of note, our void count at the end of this year's first quarter was about 19,000, up 35% compared to the first quarter of last year, and up 7% sequentially since the end of the fourth quarter of 2011.

Turning to our Electric Power segment, revenues increased approximately 65% in this year's first quarter compared to the same period last year. 12-month backlog at the end of the first quarter for the Electric Power segment increased 45%, and total backlog for this segment increased 14% compared to the end of the 2011 first quarter. We are in the construction phase on 12 large electric transmission projects, and most are progressing as expected without significant delays. We continue to see significant opportunities for large electric transmission awards in 2012 and 2013, as utilities move forward with these projects to improve grid reliability and transport power from renewable sources to load centers. We believe we are still in the early stages of a multiyear transmission build-out in the United States and Canada, and expect our Electric Power segment backlog to remain strong throughout 2012 and beyond. We are currently in various stages of discussions on approximately $1 billion of large electric transmission projects that we expect will be awarded this year.

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