Dycom Industries Inc. (NYSE:DY) stock traded lower Wednesday after the company issued third-quarter adjusted earnings guidance with a midpoint below Wall Street estimates.
Earnings Snapshot
Dycom reported adjusted earnings of $5.29 per share, beating the $4.72 estimate. Contract revenue climbed 45.6% year over year to $2.01 billion, topping the $1.98 billion estimate. Organic revenue increased 16.7%.
CEO Dan Peyovich cited strong digital infrastructure demand, improved profitability and above-market growth. New contract awards pushed backlog to a record $12.2 billion. That included more than $1 billion of long-haul, middle-mile and defense fiber projects.
Adjusted EBITDA rose 53.5% to $315.5 million. The adjusted EBITDA margin expanded 81 basis points to 15.7%.
Operating cash flow totaled $103.7 million, while trailing 12-month free cash flow nearly tripled. Dycom ended the quarter with $340.1 million in cash and more than $1.09 billion in liquidity.
Segment Performance
Communications revenue reached $1.61 billion, with organic growth of 16.7%. Fiber-to-the-home revenue jumped nearly 60% during the first half.
However, about $150 million of wireless revenue shifted into fiscal 2028. Dycom said the underlying backlog and program scope remained unchanged.
Communications adjusted EBITDA increased to $218.3 million. Its margin fell 134 basis points to 13.6% due to expansion investments, wireless project delays and higher fuel costs.
Building Systems generated $397.5 million in revenue and $97.2 million in adjusted EBITDA. Its margin was 24.5%. National Technology Integrators contributed $22.9 million in second-quarter revenue.
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Share Repurchase Program
Dycom approved a new $150 million share repurchase program through February 2028. It replaces the previous $150 million authorization, which had about $83.9 million remaining.
Outlook
Dycom raised its fiscal 2027 revenue forecast to $7.48 billion to $7.66 billion from $7.38 billion to $7.65 billion. The consensus estimate is $7.62 billion.
For the third quarter, Dycom expects adjusted earnings of $4.33 to $4.79 per share. The midpoint of $4.56 falls below the $4.79 estimate.
The company forecast quarterly revenue of $1.90 billion to $1.98 billion, compared with the $1.94 billion estimate.
Dycom is also building a flagship training facility in Georgia, which it expects to open during the first half of 2027.
DY Price Action: Dycom Industries shares were down 11.07% at $312.85 at the time of publication on Wednesday, according to Benzinga Pro data.
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