Power Services Surges 9.3% on Strong Q1 Earnings, Raised Guidance
1min read Power Services (PWR.US), an american energy infrastructure services provider, saw a remarkable surge on Thursday, emerging as one of the top performers in the S&P 500 index with a single-day increase of 9.3%, closing at $319.82. This performance outpaced microsoft (MSFT.US), which also rose by 7.63% following its earnings report. Despite a modest 1.2% increase since the beginning of the year, power services has accumulated a 25% gain over the past 12 months.
The significant rise was primarily driven by the company's first-quarter financial results, which exceeded market expectations, and an upward revision of its full-year performance guidance. As the demand for electricity in the United States continues to grow, this Houston-based energy contractor is poised for stronger development.
Power Services reported first-quarter revenue of $6.2 billion, surpassing analysts' expectations of $5.9 billion. The adjusted diluted earnings per share stood at $1.78, also exceeding the forecasted $1.67. The company's operations are divided into two main segments: the Power segment, which serves clients in renewable energy, technology, and communications, and the Underground & Infrastructure segment, focused on the oil and gas industry.
Despite the strong financial performance, Power Services acknowledged uncertainties in the macroeconomic outlook due to tariff policies and strained trade relations. The company expressed concerns that these factors could potentially lead to a recession. However, Power Services emphasized that most of its contract terms limit its direct exposure to increased tariff costs, although clients' supply chain costs and operational pressures could impact future projects.
To mitigate potential risks, Power Services has implemented measures to optimize its supply chain, including strategic pre-purchasing and seeking new suppliers to reduce costs and ensure material availability.
Despite the macroeconomic challenges, Power Services' management remains cautiously optimistic. The company raised its full-year performance expectations, projecting annual net revenue between $26.7 billion and $27.2 billion, and adjusted earnings per share between $10.05 and $10.65, both higher than previous estimates.
During the earnings call, Chairman and CEO Duke Austin highlighted the company's strong double-digit growth in earnings before interest, taxes, depreciation, and amortization (EBITDA). He also revealed that the company currently holds a record $35.3 billion in uncompleted orders, providing a solid foundation for future growth. Chief Financial Officer Jayshree Desai added that rating agency s&p global had upgraded Power Services' long-term and short-term issuer credit ratings. Desai stated that these improved credit ratings would help the company lower financing costs, expand financing channels, enhance financial resilience, and further support its long-term growth strategy.
