Quanta Services Selected By NextBridge For Ontario Project

Quanta Services, Inc. (NYSE:PWR) was chosen by NextBridge Infrastructure to construct the Ontario East-West Tie Line Project in northern Ontario through a competitive bidding process. The leading specialized contracting services company booked undisclosed value of the contract, which is expected to commence late next year and conclude in late 2020.

Per the deal, Quanta Services, through its operating subsidiary, Valard Construction, will offer construction services including project management, material management as well as construction permitting. The company will also provide installation services for around 290 miles of double circuit 230 kilovolt transmission line connecting Marathon Transformer Station and Lakehead Transformer Station.

The company will lend its expertise to safely and cost-effectively execute the project, which is intended to improve the long-term reliability of the electricity supply in northwestern Ontario. Further, the company believes the project is capable of creating up to 700 jobs during construction and providing extra economic benefits to the local community.

Existing Business Scenario

Currently, the company is pursuing multiyear capital programs, which include both large and smaller electric power infrastructure projects. Large high-voltage electric transmission project opportunities with numerous utilities and merchant transmission companies in North America bode well for long-term growth. Particularly, the North America electric transmission and distribution markets are expected to act as one of the key catalysts for the company.

The company remains confident about the prospects of end markets in both of its segments, namely, Electric Power and Oil & Gas segments, over the next two years. The company’s oil and gas segment outlook also looks promising, primarily due to the improving mainline and natural gas distribution and integrity markets. Notably, the Zacks Rank #3 (Hold) company has returned 20.5% in the past six months, outperforming the industry’s growth of 15.5%.

Despite these positives, the company’s business is anticipated to be affected by uncertain global political and economic conditions. The current volatility in the oil and gas market, along with reduced consumer spending, has been affecting the company’s projects and orders. Further, the company’s considerable exposures to foreign currency risks have been weighing on financials.

Stocks to Consider

Some better-ranked stocks from the same space include Norbord Inc. (NYSE:OSB) , D.R. Horton, Inc. (NYSE:DHI) and NVR, Inc. (NYSE:NVR) . While Norbord sports a Zacks Rank #1 (Strong Buy), D.R. Horton and NVR carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Norbord has surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 0.3%.

D.R. Horton has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 5.0%.

NVR has outpaced estimates in the preceding four quarters, with an average earnings surprise of 17.2%.

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