Companies
Quanta Services Reports Sharply Higher 2023 Net Income of $750M
ENR tracks the financial performance of key engineering and construction contractors.
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Quanta Services, the Houston-based specialty contractor, reported sharply higher revenue and income for 2023—with $750.1 million in net income on $20.9 billion in revenue, compared to $511.6 million on $17 billion for the prior year.
Quanta's strength is in overhead power transmission and distribution lines and underground utilities. The company bettered 2022 revenue for a third business segment, renewable energy, by $2.39 billion. Electric power revenue increased by $757 million over the prior year and underground utility revenue by $660 million.
Rich with $3.6 billion in cash as of 2023's third quarter, Quanta (PWR-NYSE) acquired two companies in January for consideration of about $425 million, noted Chief Financial Officer Jayshree Desai in a Feb. 22 teleconference for investors. Names of the purchased firms have not been disclosed.
Quanta has been exiting non-U.S. operations, except for Australia, to focus on North America and on profit margins.
"We've always discussed around 10% in the electric segment," CEO Earl C. Austin told investors on the conference call related to margins. "Is there opportunity for upside on the electric side? We do believe there is. It depends on storms. It depends on utilizations" and on finishing less profitable work. He added: "We need to get through some things."
One relatively recent big acquisition, made for $2.7 billion in 2021, was Avon, Minn.-based Blattner Holdings. It has one of two big Quanta contracts on the planned SunZia wind project in Arizona and New Mexico. Developed by San Francisco-based Pattern Energy Group LP, the project would connect to a massive yet-to-be-built wind energy project in New Mexico and would bring 3,000 MW of power to Western states.
A small part of the project still faces a legal challenge. Oral arguments are set for March 7 in a Tucson federal court related to a January lawsuit by Arizona Tribal Nations and environmental groups to reverse federal government approval of a construction restart on a 50-mile portion of the project. In a lawsuit filed in January, plaintiffs sought to halt work on that part of the 550-mile, high-voltage direct-current line between central New Mexico and south-central Arizona.
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The plaintiffs want the work to wait until all historic and cultural properties in Arizona's San Pedro River Valley are identified and evaluated.
Pattern had selected Quanta Infrastructure Services and Blattner for engineer-procure-construct contracts on the transmission line and solar power project, respectively.
"We have plenty of room to move and work with our client [on other parts of the project than the contested section]," said Austin. "We’re not concerned. The project starts now [and] ramps [up] throughout the year."
