Quanta Services, Inc. (NYSE:PWR) Q4 2022 Earnings Call Transcript

Duke Austin : As far as the supply chain what we see today, what we’ve seen over the past quarters is how we looked at it going forward. If it gets better, certainly, we’ll come back and we’ll talk about it, but we see intermittence in the supply chain on utility side for the year, basically, I do think the renewable segment, supply chain is better in the second half, and we’ve certainly looked at that as well. But how much better? I’m not sure. And if it does, if it creates, there is some conservatism in the renewables segment due to that. We’ve baked all that in, and I feel like hit it down the middle with prudent guidance. As far as the revenue, I’ll let Jayshree talk about.

Jayshree Desai : Yes. I would say it’s a mix. It’s hard to — I don’t want to sit here and say how much is due to delays versus there has been additional backlog on the renewable segment, that’s starting to come in, and you’ve got some projects that have moved into the — from ’22 to ’23, it’s both.

Operator: Our next question comes from the line of Michael Dudas with Vertical Research.

Michael Dudas: Duke, you announced several large T&D projects over the last couple of months. Can you talk about what you have in the pipeline relative to those types of projects and what your selectivity might be going forward? And maybe how that plays out over the next several years because these are much longer gestation projects than we have in your base business?

Duke Austin : Yes. Thanks, Michael. We talked about the stacking effect of the projects, the larger projects they stack on the base. I think when we went through CREZ seven, eight years ago, the company got off the base. I would tell you today, we’re highly focused on our base business roughly 85%, 90% of that resilient business that we have. We’ll continue to focus on that. We’re being every project the same. We did the risk. We’re not going to win them all. We’re just not. And I’ve watched one recently look at — we know our cost, we know what we’re doing. We’re not going to take risk. It’s not something we’re going to gamble on. If we’re just not, and it’s not Vegas, we’re going to get ourselves in a good position to make sure that we execute on these projects. And we don’t need to necessarily take the larger projects. We can build our base. But we do see an incremental amount of larger projects coming in, in ’23, ’24 and beyond.

Operator: Our next question comes from the line of Brent Thielman with D.A. Davidson.

Brent Thielman : Duke, expectation for reduction in large pipeline work in ’23 versus ’22, is that just a function of sort of project sequencing for your business? Because your backlog is up pretty nicely in undergrads that just sort of reflective of the environment we’re in. And I also just be curious there’s opportunities to still fill that void you’re sort of talking about for the underground business late in the year.

Duke Austin : Yes, the backlog was primarily driven by MSA growth there. And when we look at the larger diameter pie, we talked about guiding to kind of 450, 500 type range year-over-year. Certainly, there’s opportunities for us to do $1 billion and that opportunity is out there. We guided to where we’re at. Just for us, we can make the numbers in a portfolio approach where we’re at. I felt comfortable with them. We felt comfortable if things move, let’s just say, solar moved or, let’s say, large pipe went the other way. The portfolio we have makes us what I think very predictable. And that — those larger dynamics of pipe and some of our renewable projects, we took a prudent approach to guidance. We’ll update you if we get more work, we’ll certainly update.

Operator: At this time, I’m not seeing any questions coming in. I’d like to pass it back over to the Quanta management team for any closing comments.