Quanta Services, Inc. PWR is scheduled to report first-quarter 2025 results on May 1, before the opening bell.

In the last reported quarter, the adjusted earnings topped the Zacks Consensus Estimate by 11.4% and grew 44.1% year over year. Revenues marginally missed the consensus mark by 1.2% but increased 13.3% year over year.

Quanta’s earnings topped the consensus mark in three of the trailing four quarters and missed on the remaining occasion, with an average surprise of 6%.

PWR’s Trend in Estimate Revision

The Zacks Consensus Estimate for Quanta’s first-quarter adjusted earnings per share (EPS) has declined to $1.67 from $1.73 over the past 30 days. Yet, the estimated figure indicates 18.4% growth from the year-ago EPS of $1.41.

The consensus mark for revenues is pegged at $5.88 billion, implying 16.8% year-over-year growth. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Quanta Services, Inc. Price and EPS Surprise

Quanta Services, Inc. price-eps-surprise | Quanta Services, Inc. Quote

Factors Likely to Have Shaped Quanta’s Q1 Performance

Revenues

Quanta’s first-quarter top line is expected to have increased year over year, on the back of strong demand trends for its diversified service offerings. The multi-year initiatives aimed at modernizing utility infrastructure and expanding renewable energy generation and transmission infrastructure are expected to have contributed to the quarterly growth.

The notable increases in power demand in the United States, driven by the adoption of new technologies and related infrastructure, including Artificial Intelligence and data centers, accompanied by federal and state policies designed to accelerate the energy transition, are also likely to have boded well.

Segment-wise, our model expects revenues from the Electric Infrastructure Solutions segment (which accounted for 82.1% of total revenues in fourth-quarter 2024) and the Underground Utility and Infrastructure Solutions segment (which accounted for 17.9% of total revenues in the fourth quarter) to increase year over year by 19.9% to $4.69 billion and 7.7% to $2.21 billion, respectively.

Notably, Quanta’s inorganic initiatives, along with its focus on the growth strategy, are also likely to have aided its quarterly performance, positioning it well for the upcoming quarters.

Margins

Although Quanta has been facing headwinds in the form of inflated labor costs, project delays and supply inefficiencies, leverage from the increased top line, growing backlog and efficient project deliveries is likely to have aided its bottom line during the first quarter. Also, variability in project timing adds to the tailwinds favoring the margins during the quarter.

Per our model, Quanta’s overall operating margin is expected to expand 100 basis points (bps) from a year ago to 4.1% in the quarter. Segment-wise, the operating margin in the Electric Infrastructure Solutions segment is expected to expand 80 bps to 8.1%, while that for the Underground Utility & Infrastructure Solutions segment is expected to increase 140 bps to 5.6%.

We expect adjusted EBITDA margin to grow 50 bps year over year to 8.2% in the quarter.

What the Zacks Model Predicts for PWR

Our proven model does not conclusively predict an earnings beat for Quanta this time around. A 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. Unfortunately, this is not the case here, as you will see below.

Earnings ESP: PWR has an Earnings ESP of -1.18%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 3.

Stocks With the Favorable Combination

Here are some companies in the Zacks Construction sector, which per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.

Dream Finders Homes DFH has an Earnings ESP of +19.01% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dream Finders reported better-than-expected earnings in two of the last four quarters and missed on other two occasions, the average negative surprise being 4.4%. Dream Finders’ earnings for the first quarter of 2025 are expected to increase 10.9%.

MasTec, Inc. MTZ has an Earnings ESP of +0.85% and a Zacks Rank of 3.

MasTec’s earnings beat estimates in each of the last four quarters, the average surprise being 31.6%. MasTec’s earnings for the quarter to be reported are expected to increase 361.5%.

Primoris Services PRIM currently has an Earnings ESP of +13.02% and a Zacks Rank of 3.

Primoris Services’ earnings beat estimates in all the last four quarters, the average surprise being 157.7%. Primoris Services’ earnings for the quarter to be reported are expected to jump 53.2%.

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Quanta Services, Inc. (PWR) : Free Stock Analysis Report

Primoris Services Corporation (PRIM) : Free Stock Analysis Report

MasTec, Inc. (MTZ) : Free Stock Analysis Report

Dream Finders Homes, Inc. (DFH) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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