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Stantec's (STN) Q3 Earnings Meet Estimates, Stock Down 2.2%

Stantec Inc.’s STN third-quarter 2022 earnings matched the Zacks Consensus Estimate and revenues beat the same.

The stock has declined 2.2% since the earnings release on Nov 10 as the company failed to beat on earnings. Quarterly earnings came in at 67 cents per share, which increased 17.5% year over year.

Revenues of $889.3 million surpassed the consensus mark by 1.4% and increased 20% year over year. The top line includes the favorable impact of 11% organic growth and 12.9% from acquisitions.

Stantec shares have declined 12.3% over the past year compared with the 16.8% decline of the industry it belongs to.

Stantec Inc. Price

Stantec Inc. Price
Stantec Inc. Price

Stantec Inc. price | Stantec Inc. Quote

Other Quarterly Details

Project margin increased 23.7% year over year to $627 million on the back of higher net revenues. Project margin, as a percentage of net revenues, came in at 54.1%, down 20 basis points (bps) year over year. Contract backlog came at a record high of $6.2 billion. Adjusted EBITDA grew 23.9% year over year to $193.3 million. Adjusted EBITDA margin came in at 16.7%, flat with the prior-year quarter.

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Stantec generated $93.1 million of cash from operating activities in the quarter. Capital expenditures were $20.1 million. During the reported quarter, the company paid $19.9 million through dividends.

2022 Outlook

Stantec expects 2022 adjusted EPS growth of 22-26% and net revenue growth of 18-22%. The company anticipates the adjusted EBITDA margin to be between 15.3% and 16.3% and the adjusted return on invested capital to be more than 10%.

Stantec currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Performance of Some Other Business Services Companies

Equifax EFX reported stellar third-quarter 2022 results, wherein both its earnings and revenues surpassed the respective Zacks Consensus Estimate.

EFX’s adjusted earnings of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. Revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year.

Omnicom OMC also reported better-than-expected third-quarter 2022 results.

OMC’s earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.

The Interpublic Group of Companies IPG reported third-quarter 2022 adjusted earnings of 63 cents per share, beating the Zacks Consensus Estimate by 6.8%. The bottom line has been constant on a year-over-year basis.

IPG’s net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.


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