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Stantec (STN) Stock Falls 5.3% Following In-Line Q1 Earnings

Stantec Inc.’s STN first-quarter 2023 earnings met the Zacks Consensus Estimate while revenues beat.

However, the earnings meet didn’t impress investors as the stock fell 5.3% since the release of financial numbers on May 10.

Adjusted earnings matched the Zacks Consensus Estimate of 54 cents per share and improved 12.5% from the year-ago figure.

Total revenues of $909 million surpassed the consensus estimate by 6.3% and increased 9.7%% on a year-over-year basis. The top line includes 12.2% organic growth and 1.4% gain from acquisitions.

Stantec Inc. Price, Consensus and EPS Surprise

Stantec Inc. Price, Consensus and EPS Surprise
Stantec Inc. Price, Consensus and EPS Surprise

Stantec Inc. price-consensus-eps-surprise-chart | Stantec Inc. Quote

Quarter Details

The project margin of $660 million increased 16.4% from the year-ago figure. Project margin, as a percentage of net revenues, was 53.7%.

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Adjusted EBITDA grew 17.7% to $179.1 million on a year-over-year basis. Adjusted EBITDA margin was 14.6%, expanded 10 basis points from the previous-year figure.

The backlog increased to $6.2 billion, up 14.8% from the year-ago quarter. The figure marked an increase of 5.6% from the Dec 31, 2022, figure.

Stantec generated $36.7 million in cash from operating activities in the quarter.

Reposts 2023 outlook

The company expects net revenues to rise 7-11% in the year compared with 2022 levels.

Adjusted EBITDA margin is expected in the band of 16-17%. STN targets to generate a return on invested capital of more than 10.5%.

Stantec currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Earnings Snapshots of Some Service Providers

Omnicom OMC reported better-than-expected first-quarter 2023 results.
OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13% and our estimate by 11.4%. EPS increased 12.2% year over year.

Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.

Equifax EFX also reported better-than-expected first-quarter 2023 results.
EFX’s adjusted earnings of $1.43 per share beat the consensus mark by 4.4%. However, the bottom line declined 35.6% from the year-ago figure.

Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% year over year.

ManpowerGroup MAN reported lower-than-expected first-quarter 2023 results.

MAN’s adjusted earnings of $1.61 per share lagged the consensus mark by 0.6% but matched our estimate. Revenues of $4.8 billion missed the consensus mark by 1.3% and our estimate by a slight margin. The top line decreased 7.6% year over year.

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ManpowerGroup Inc. (MAN) : Free Stock Analysis Report

Omnicom Group Inc. (OMC) : Free Stock Analysis Report

Equifax, Inc. (EFX) : Free Stock Analysis Report

Stantec Inc. (STN) : Free Stock Analysis Report

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