Please ensure Javascript is enabled for purposes of website accessibility

Why Dycom Shares Soared 23% on Tuesday

By Daniel Miller - Updated May 19, 2020 at 11:32AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's adjusted earnings per share blew past estimates.

What happened

Shares of Dycom Industries (DY -1.79%), which offers specialty contracting services primarily for telecom service providers, were soaring over 23% early Tuesday morning after the company's first-quarter results blew past analysts' estimates.

So what

Revenue declined 2.3% compared with the prior year to $814.3 million, easily topping analysts' estimates of $746.6 million. But the driving force behind the stock price jump was adjusted earnings per share of $0.36, smashing analyst estimates calling for a $0.04 adjusted per-share loss.

Worker standing in front of telecommunications tower

Image source: Getty Images.

In a press release, the company said: "During the COVID-19 pandemic, Dycom's services have generally been considered essential in nature and have not been materially interrupted. As the situation continues to evolve, the Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how it impacts the Company's customers, subcontractors, suppliers, vendors and employees, in addition to how the COVID-19 pandemic impacts the Company's ability to provide services to its customers."

Now what

Dycom also had a few interesting notes about pandemic near-term and long-term effects. Investments by major companies to upgrade wire-line networks have set the stage for large increases in peak demands on telecommunication networks, and those programs and upgrades are likely to accelerate in the intermediate to long term. In the near term, uncertainty could hurt some customer plans, but overall, management believes COVID-19 will simply reinforce and/or accelerate pre-pandemic industry trends.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dycom Industries, Inc. Stock Quote
Dycom Industries, Inc.
$110.02 (-1.79%) $-2.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.