Centuri's 2024 Q4 Earnings Call: Diverging Views on Offshore Wind Backlog and Strategic Outlook

These are the key contradictions discussed in Centuri's latest 2024Q4 earnings call, specifically including: Offshore Wind Backlog and Strategic Direction:



Operational and Financial Performance:
- Centuri reported revenues of $2.64 billion for the full year 2024, exceeding the midpoint of the guidance range of $2.5 billion to $2.7 billion.
- Consolidated gross profit was 32% higher compared to the prior year period, with a gross profit margin of 9.9% in Q4 2024.
- The improvement was driven by increased volumes and favorable project mix, particularly in the electric and gas segments.

Electric Segment Growth and Storm Restoration:
- The electric segment experienced a 49.7% year-over-year increase in revenue, primarily due to storm restoration services and increased bid volumes.
- Storm restoration revenues exceeded 80% of the recent historical average, with additional revenues from LNG awards.
- The growth was supported by strategic workforce development and enhanced customer relationships, contributing to successful storm response and longer-term opportunities.

Gas Segment Challenges and Improvements:
- Gas segment revenues normalized, with unfavorable margins due to rate case approvals and competitive pressures, requiring resource realignment.
- Margins are expected to normalize during 2025 to historical averages of between 7% to 7.5%.
- The company is focused on exiting underperforming contracts and restructuring the gas group to improve operational efficiency.

Strategic Outlook and Market Dynamics:
- Centuri aims to drive double-digit EBITDA growth in its core business, excluding offshore wind projects.
- The company is positioning for opportunities in evolving energy demand, aging grid upgrades, and infrastructure expansion, particularly in the electric segment.
- The focus is on increasing market share and expanding into new end markets, leveraging a strong pipeline and strategic business development efforts.