Backlog has a solid future
Arecord 12-month backlog of energy infrastructure construction projects boosted the financial performance of Quanta Services, the Houstonbased company that builds and maintains power lines, power plants and pipelines.
The company is in a sweet spot to capitalize on demand to replace the nation’s aging power line infrastructure, generate more renewable energy sources and increase oversight to improve the reliability of power grids.
“We finished 2016 on solid footing, with significant revenue and profitability momentum in the second half of the year,” Earl “Duke” Austin Jr., president and CEO of Quanta, told investment analysts during a conference call earlier this year.
Construction of pipeline projects also generated considerable revenue, driven by the need to transport natural gas from the Marcellus and Utica shale regions in Pennsylvania, New York and West Virginia, according to Austin’s remarks to analysts. Quanta Services is No. 6 in the Chronicle 100.
Revenue for 2016 was $7.6 billion, up 1 percent from the previous year.
The company’s overall profitability slipped, however, because of unspecified engineering and production problems on a power plant construction project in Anchorage, Alaska, according to company financial reports. Quanta reported net income of $198.4 million in 2016, compared with $310.9 million the previous year.
Earnings per share grew 103.2 percent when the company’s discontinued operations are excluded. Shareholders saw a 72.1 percent total return.
Nearly 80 percent of Quanta’s operations are in the United States, with the remainder in Canada, Latin America and Australia, according to information provided to investors. The company has 28,000 employees.