Quanta Services Earnings Call Nuggets: Shale Work Margins and Guidance at the Low End

Quanta Services, Inc. (NYSE:PWR) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Shale Work Margins

Dan Mannes – Avondale Partners: First of all thanks a lot for all the color on how you came up with your guidance and I just had a brief question particularly on the pipeline segment. When you talk about shale work for ‘13, you sort of talk through how you get to the revenue side. Can you talk through how we should think about margins on the shale work especially given the nice improvement we were seeing sequentially during the course of ‘12 on shale work?

James F. O’Neil – CEO: Dan, we are saying that we should be in the mid to upper single-digits range on shale gathering work that’s without any big pipe for the year. Certainly we are getting more volume. We have got more volume throughout the second half of the year and I’d be disappointed if weren’t in the upper end of that range this year for the shale gathering work.

Dan Mannes – Avondale Partners: And the secondly on mainline, and I definitely hear you caution there in terms of putting stuff and guidance when it’s awarded especially given all the regulatory issues we see, but we are sort of hearing from the pipe developers they are certainly a sense of maybe some concern about availability or even hearing some of the large developers talking about entering into agreement and things like that. Can you talk about maybe your positioning for those types of arrangements beyond even KXL and how you are looking to participate in the mainline market over the next couple of years?