Quanta Services, the Houston-based specialty contractor, reported much higher revenue and earnings for 2023, with net income of $750.1 million on revenue of $20.9 billion, compared to $511.6 million in 17,000 million from the previous year.
Quanta’s strength is in overhead power transmission and distribution lines and underground utilities. The company improved 2022 revenue for a third business segment, renewable energy, by $2.39 billion. Electric power revenue increased by $757 million over the previous year and underground utility revenue by $660 million.
Rich with $3.6 billion in cash as of the third quarter of 2023, Quanta (PWR-NYSE) acquired two companies in January for about $425 million, Chief Financial Officer Jayshree Desai said on a conference call on February 22 for investors. The names of the acquired companies have not been disclosed.
Quanta has exited operations outside the US, excluding Australia, to focus on North America and profit margins.
“We’ve always talked about 10% in the electric segment,” CEO Earl C. Austin told investors on the margin-related conference call. “Is there an opportunity to increase on the electrical side? We think so. It depends on the storms. It depends on the uses” and to finish less profitable jobs. He added: “We have some things to overcome.”
A relatively recent large acquisition, made for $2.7 billion in 2021, was Avon, Minnesota-based Blattner Holdings. It has one of Quanta’s two large contracts on the planned SunZia wind project in Arizona and New Mexico. Developed by San Francisco-based Pattern Energy Group LP, the project would connect to an array yyou-to-build wind power project in New Mexico and would bring 3,000 MW of power to the western states.
A small part of the project still faces a legal challenge. Oral arguments are set for March 7 in federal court in Tucson related to a January lawsuit by Arizona tribal nations and environmental groups to overturn the federal government’s approval of a construction restart on part of the 50 mile project. In a lawsuit filed in January, the plaintiffs sought to halt work on that portion of the 550-mile high-voltage direct current line between central New Mexico and south-central Arizona.
The plaintiffs want the work to be put on hold until all of the historic and cultural properties in Arizona’s San Pedro River Valley are identified and assessed.
The pattern had selected Quanta Infrastructure Services and Blattner for the engineer-procure-build contracts for the transmission line and the solar project, respectively.
“We have a lot of room to move and work with our client [on other parts of the project than the contested section]” Austin said. “We’re not worried. The project starts now [and] cramps [up] throughout the year.”
