Duke Austin: I do think you can push some things out. I mean you can – EV penetration is not there so you cannot plan and have interconnections at the distribution level. We’re seeing some where our crews, for example, are working 60, 70 hours, you’re working 50 hours, but you’re not losing crews, you’re just working less hours and you’re seeing some of that in the fourth quarter where we have crews that are just working 40. And that’s fine, but we’re adding crews as well. So really, as you move into 2024, they move capital budgets up, things look better. I do think load growth will exceed what most people think, it really helps with higher interest and costs. So I think we can get through that as an industry.
The only thing is if you had like crazy interest, and I don’t see that coming. I do believe we’ve kind of stabilized there and utilities either. You see some that are selling assets to put it back in the regulated business. But look, you have a duty to serve and you’ve seen in California where they have like 120 days to make interconnections now by law. That’s going to come – it’s going to be prevalent across the country. And I just don’t believe that you can delay interconnections nor can you delay queue and the queue is coming out of everyone, and we’ve got – as an industry, we got a plan a little better. We’ve got to do some things, and we’ve got to get in front of this. And then you can’t be selective in urgency here.
We’ve got to get the planning done and the work done for the next couple of decades. So we feel confident, yes, you can have some bounces along the way, but we’ve always said that there’ll be starts and stops a bit, but the CAGR itself will continue to drive the market for long term any kind of delay you have just means it’s pent-up demand, it’s coming at you. So we feel good. We feel good with our customers and our conversations have been. You may not see them grow capital 20%, they just grew at 15% or from upward levels, but I don’t – I’m not seeing much pullback at all. In fact, I’m seeing more growth to capital with our clients.
Marc Bianchi: That’s helpful. Thanks, Duke. And then on 2024 I know you don’t want to get into giving guidance, but double-digit growth is what you’ve said. And if I look at consensus, it’s up almost 20%. I’m curious if that’s attainable, knowing that you’re not guiding to it, but just trying to understand the brackets around what’s possible in 2024.
Duke Austin: Yes. We’re not giving guidance. So I’ve given the buzz all I’m going to give. And so we’ve talked about the opportunity to grow double digits. I think that’s there. We can stack on at times. It’s too early to say. The models that are out there, I don’t know what’s in their Kip or Jayshree can go look at it, but I didn’t look at it, I just feel comfortable in the double-digit, talking about double-digit margin growth at this point opportunity for that as well.
Jayshree Desai: Double-digit EPS.
Duke Austin: EPS growth. Thanks.
Marc Bianchi: Yep. Okay, thanks so much.
Operator: Thank you. Our next question comes from Chad Dillard with Bernstein. Please proceed with your question.
Unidentified Analyst: Hi, how are you? This is Erico [ph] filling in for Chad Dillard. How we should think about the mix of large versus small projects going into 2024? How will the – how would that impact margin profile?
Duke Austin: Can you say that again? I’m sorry, you broke up.
Unidentified Analyst: Yes. Sorry. How we should think about the mix of large versus small projects going into 2024? And how will that impact the margin profile?
Duke Austin: I think they’re both growing, and we stand by the state of margins to operate in double digits. We certainly have the opportunity to operate in double digits in the renewable segment as well as the Electric segment at upper singles in the UUI [ph] business, very much like we started – we’ll be prudent about how we guide. So you can expect us to guide prudently in 2024. I do – we do see growth to 2024. So the same approach we’ve taken for the last eight years, seven years will be taken going forward. As far as the mix, it’s still running mid 80%, 85% base business, something like that. And I believe that will be there. But the large project dynamic certainly there, we’re seeing multiple fronts of large projects. It will be early, but we do believe that is starting to stack a bit.
Jayshree Desai: As well as our base business growth.
Duke Austin: Yes. Grows at the same rate.
Unidentified Analyst: How sustainable are underground margins?
Duke Austin: Look, we’ve always said we can get leverage out of the UUI margins. Our industrial business is probably a record year this year. We still like the industrial business a lot. So the margins have picked up. We have got levers. We do move back and forth. But I caution everyone again that this is a portfolio. This portfolio moves around, and you’ve got to look at it as a portfolio. It derisks you down at the bottom. That’s why you’re not seeing the blips at the bottom. Now you’re seeing double-digit growth. And again, I’d caution that if we get into this segment discussion, it’s these crews go from electric to gas to telecom and we should perform well in all of them. And our goal is to make sure that the company itself grows and our margin profile stays sustained over time.
And that’s the portfolio we’ve built to derisk the investor as well as provide opportunities for beyond double-digit growth. And look, we’ll talk about the segments, but I go back and I point to 18% top line growth, still performing at high margins across the segments, and we’re delivering double-digit EPS.
Unidentified Analyst: Thank you very much.
Operator: Thank you. Our next question comes from Steven Fisher with UBS. Please proceed with your question.
Steven Fisher: Thanks. Good morning. Duke, your comments on that last question, notwithstanding, I will ask you a segment margin question. And maybe for Jayshree, I don’t know. But your guidance for renewables still implies ramping to double digits in Q4 margins. And so I’m just curious what’s going to be different in Q4 relative to Q3, that’s going to allow you to hit those double-digit margins. I mean you’re still going to be in early stages of projects. So you mentioned about carrying lower accruals. It sounds like there is a cadence issue not sort of an execution issue. So what – what’s going to be different in Q4? And then how does that carry into 2024?
Duke Austin: Yes. I think it’s where you started on all your renewables. We kind of started early in the year and late last year with multiple large projects there. So as those – and we booked all the way through, still booking. So you’re getting a better cadence in the larger project dynamics. So some of them are finishing up and so that allows us to obviously look at contingent releases, things like that in the fourth quarter in the renewable segment. So that’s what you’re seeing. And you’re also getting scale out of that business as well. As you go into 2024, same thing, the cadence, you are starting some larger line projects on transmission there. And so it will have a little bit of effect, but you don’t have Canada coming in, things like that. And I can let Jayshree to comment on the rest.
