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7 years ago
UPDATE 1-Dycom shares rise on strong Q3 results, Q4 rev view
May 26, 2010 / 4:40 PM / 7 years ago

UPDATE 1-Dycom shares rise on strong Q3 results, Q4 rev view

* Sees Q4 revenue rising 10 pct sequentially

* Says renews contracts with AT&T, Comcast, Verizon

* Shares up as much as 18 percent (Adds comments from conference call; updates share movement)

May 26 (Reuters) - Shares of Dycom Industries Inc (DY.N) rose as much as 18 percent Wednesday, a day after the engineering and construction services firm reported third-quarter results above analysts' estimates, helped in part by marginally lower costs.

On a conference call with analysts, the company, whose customers include telecommunications providers and utilities, forecast fourth-quarter revenue to grow more than 10 percent sequentially.

Dycom said it renewed contracts with three of its five biggest customers -- AT&T Inc (T.N), Comcast Corp (CMCSA.O) and Verizon Communications Inc (VZ.N).

For AT&T, Dycom's largest customer, it renewed construction services agreements in Georgia and South Carolina.

The three companies, along with Centurylink (CTL.N) and Time Warner Inc (TWX.N), contributed about 69 percent to third-quarter revenue of $231.6 million.

The company said it expected to benefit from the broadband stimulus plan from the second half of 2010, and then in 2011 and 2012.

In March, U.S. regulators released a blueprint for upgrading Internet access for all Americans, with Internet speeds up to 25 times the current average, expanded coverage and more airwaves for mobile services.

A shift in airwaves from broadcasters like CBS Corp (CBS.N) could benefit wireless providers like AT&T (T.N) and Verizon Wireless. [ID:nN15206576]

For the third quarter ended April 24, Dycom earned 2 cents a share, excluding items.

Revenue fell 10 percent to $231.6 million.

Analysts on average were expecting the company to break even, on revenue of $225.5 million, according to Thomson Reuters I/B/E/S. [ID:nASA00EH8]

Net other income in the quarter rose 25 percent to $4.5 million, while costs fell 7 percent $191.3 million.

Shares of the company were trading up 16 percent at $9.86 in midday trading on the New York Stock Exchange. They touched a high of $10.04 earlier in the session. (Reporting by Megha Mandavia in Bangalore; Editing by Maju Samuel)

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