Canada markets closed
  • S&P/TSX

    19,541.27
    -49.47 (-0.25%)
     
  • S&P 500

    4,288.05
    -11.65 (-0.27%)
     
  • DOW

    33,507.50
    -158.84 (-0.47%)
     
  • CAD/USD

    0.7365
    -0.0050 (-0.68%)
     
  • CRUDE OIL

    90.77
    -0.94 (-1.02%)
     
  • Bitcoin CAD

    36,658.16
    +298.43 (+0.82%)
     
  • CMC Crypto 200

    579.66
    +0.90 (+0.15%)
     
  • GOLD FUTURES

    1,864.60
    -14.00 (-0.75%)
     
  • RUSSELL 2000

    1,785.10
    -9.21 (-0.51%)
     
  • 10-Yr Bond

    4.5730
    -0.0240 (-0.52%)
     
  • NASDAQ

    13,219.32
    +18.05 (+0.14%)
     
  • VOLATILITY

    17.52
    +0.18 (+1.04%)
     
  • FTSE

    7,608.08
    +6.23 (+0.08%)
     
  • NIKKEI 225

    31,857.62
    -14.90 (-0.05%)
     
  • CAD/EUR

    0.6964
    -0.0052 (-0.74%)
     

Stantec (STN) Stock Rises 2% Following Q4 Earnings Beat

Stantec Inc. STN reported mixed fourth-quarter 2022 results with earnings beating the Zacks Consensus Estimate but revenues falling short of the same.

The stock gained 2% since the earnings release on Feb 22 in response to the better-than-expected earnings performance.

Adjusted earnings (excluding 11 cents from non-recurring items) came in at 60 cents, beating the Zacks Consensus mark by 13.2%. Adjusted earnings increased 33.3% from the year-ago figure.

Total revenues of $832.7 million slightly missed the consensus estimate and decreased 11.5% on a year-over-year basis.  The top line includes 10.6% organic growth and 9.8% growth 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

 

Stantec’s shares have gained 17.6% in the past year compared with its industry’s 9.5% decline.

Quarter Details

The project margin came in at $620.5 million indicating a 22.5% increase from the year-ago figure. Project margin, as a percentage of net revenues, for the quarter came in at 54.9% as compared to 55.3% a year ago. The increase is supported by net revenue growth and solid project execution.

Adjusted EBITDA grew 34.9% to $191.7 million on a year-over-year basis. The adjusted EBITDA margin was at 17%, 150 basis points more than the previous year figure.

The backlog reduced to $5.9 billion from $6.2 billion reported at the end of the previous quarter.  The figure marks an increase of 14.9% from the Dec 31 2022 figure.

Balance Sheet & Cash Flow

Stantec generated $209.6 million in cash from operating activities in the quarter. The free cash flow generated by the company in the current quarter is $135.10 million. Capital expenditures were $28.6 million. During the reported quarter, the company paid $19.9 million through dividends.

The company has generated an adjusted return on invested capital of 10.5%in line, 20 basis points more than the year-ago reported quarter.

2023 outlook

The company expects the net revenues to go up 7-11% in the year as compared to 2022.

Adjusted EBITDA margins are expected to stay in the band of 16-17%. The company targets to generate a return on invested capital of more than 10.5%.

Stantec's Board of Directors declared a dividend of $0.195 per share, payable on April 17, 2023, to shareholders of record on March 31, 2023, representing an 8.3% increase.

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

The following stocks from the Business Service sector reported better-than-expected fourth-quarter results.

Gartner, Inc. IT,currently having a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat the Zacks Consensus Estimate by 44% and increased 23.8% year over year. IT’s revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.6% and improved 15.2% year over year on a reported basis and 20% on a foreign-currency-neutral basis.

Aptiv PLC APTV, currently carrying a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results. Adjusted earnings (excluding 41 cents from non-recurring items) of $1.27 per share beat the Zacks Consensus Estimate by 6.7% and increased more than 100% on a year-over-year basis. APTV’s revenue surpassed the Zacks Consensus Estimate by 6% and increased 12.2% year over year.

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Gartner, Inc. (IT) : Free Stock Analysis Report

Stantec Inc. (STN) : Free Stock Analysis Report

Aptiv PLC (APTV) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research