Quanta Services, Inc. (NYSE:PWR) Q3 2023 Earnings Call Transcript

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Jayshree Desai: Yes. I mean, that’s exactly right. There’s that – and then we’ll continue to progress on the other parts of the segment, right? As those projects mature, there are opportunities, and there were opportunities to release contingencies. We’ll continue to see that in the fourth quarter. And as Duke said, the scale it was for growing you’re going to start seeing – you’re seeing more and more of that fixed cost absorption. There will be more of that in the fourth quarter. So the combination of matured projects as well as that fixed cost absorption is allowing us to feel comfortable with the guide in the fourth quarter.

Duke Austin: Yes, Steven, I would also add that we talked about 3,000 add last quarter, we added roughly 4,000 in this quarter. So we’re up to 56,000 employees adding 3,000 on cadence per quarter is not easy, and it does press a bit. So I’d just caution some of that’s in there. And as you start working through that and you get good cadence with it, we can absorb a lot.

Steven Fisher: That’s really helpful. And then maybe just to ask about the electric segment. You’ve talked in prior quarters about some efficiencies in terms of Canadian underutilization as that market structure is a little different than the U.S. Can you just give us an update on that influence and maybe supply chain as well for the broader electric segment. Is that any particular influence at this time? And what visibility you have to those things kind of smoothing out?

Duke Austin: Yes. We’re operating really well in the electric segment. I mean, over time, I’ve always said double digits, 10%, 10.5% with into 11%, between 10% and 11% is our comfort spot and we’re operating at those levels. Canada is a drag. We’ve addressed a lot of things there. I think in the next year, we won’t have the drag this year. So pretty optimistic with some of that. We are getting some utilizations in the Lower 48 with some Canadian influence. But in general, we can do a lot of things on the front-end engineering. We can do a lot of things from our Canadian assets in Lower 48. So we will be utilizing them here in those assets. So I’m comfortable with where we sit in the next year. We do expect and we’re still negotiating some, but I feel confident that the larger project dynamic will start stacking in 2024, albeit early, but you’ll start to see some stocking in 2024.

Steven Fisher: Perfect. Thank you.

Operator: Thank you. There are no further questions at this time. I would like to turn the floor back over to management for closing remarks.

Duke Austin: Yes. First, I want to thank our 56,000 employees out in the field that put the numbers up every day that work hard and safe and allow us to have a good call this morning. They’re dedicated shareholders as well. So we do appreciate them. And I’d like to thank you all for participating in our conference call. We appreciate your questions and your ongoing interest in Quanta. Thank you. This concludes our call.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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