Primoris Services ((PRIM)) has held its Q4 earnings call. Read on for the main highlights of the call.
Primoris Services Corporation recently held an earnings call that painted a picture of a record-breaking year, marked by significant achievements in revenue, backlog, and cash flow. Despite facing some challenges in the energy segment and pipeline activity, the company remains optimistic about its future, particularly in utilities, renewables, and other strategic areas, with a positive outlook for 2025.
Record-Breaking Year
Primoris celebrated its best year in history, with unprecedented figures in revenue, earnings, backlog, and cash flow from operations. The total backlog reached an impressive $11.9 billion, bolstered by over $7.7 billion in new work booked throughout the year.
Strong Cash Flow
The company reported record cash flow from operations, exceeding $500 million. This achievement was driven by improvements in contract assets and upfront procurement and mobilization payments, showcasing Primoris’ robust financial health.
Utilities Segment Performance
The utilities segment experienced notable growth, with revenue increases and significant margin improvements. Favorable weather conditions, increased customer activity, and $9 million from storm restoration work contributed to gross margins rising to 12.1% from 7.4% in the previous year.
Renewables Growth
Primoris’ renewables business approached $2 billion in revenue for 2024, with nearly $900 million booked in the fourth quarter alone. The year closed with approximately $3.1 billion in backlog, underscoring the company’s strategic focus on this growing sector.
Energy Segment Challenges
The energy segment faced difficulties, with gross profit decreasing by $9.5 million or 8% compared to the prior year. Gross margins fell to 9.5%, impacted by fewer project closeouts in renewables and adverse weather conditions.
Pipeline Activity Decline
Pipeline activity remained slow and competitive, with a decline anticipated for the year. Challenges in pipeline projects affected gross margins, reflecting the competitive nature of this segment.
Impact of Regulatory Environment
The company noted uncertainty in renewables and other business areas due to a rapidly changing trade and regulatory environment, including tariffs on key electrical components, which could impact future operations.
Forward-Looking Guidance
Looking ahead to 2025, Primoris provided strong guidance, reflecting its robust 2024 performance. The company expects earnings per fully diluted share to range between $3.70 and $3.90, with adjusted EPS between $4.20 and $4.40, indicating double-digit growth. Adjusted EBITDA is projected between $440 million and $460 million. The Utilities segment aims for improved margins of 9% to 11%, while the Energy segment anticipates gross margins of 10% to 12%. Operating cash flow is expected to normalize between $200 million and $225 million.
In summary, Primoris Services Corporation’s earnings call highlighted a year of record achievements, with a positive outlook for continued growth in 2025. Despite challenges in certain segments, the company’s strategic focus on utilities and renewables, along with strong financial guidance, positions it well for future success.