What Happened?
Shares of telecommunications company Dycom (NYSE: DY) fell 12.9% in the afternoon session after the company issued weaker-than-expected third-quarter earnings guidance despite topping second-quarter revenue and profit estimates.
According to a company press release, Dycom reported second-quarter revenue of $2.01 billion, up 45.6% year-over-year, and adjusted earnings per share of $5.29. Both figures surpassed Wall Street expectations of $1.98 billion in revenue and $4.68 in adjusted EPS. Profitability improved notably, with operating margins expanding to 15.3% from 10.1% a year ago, helping adjusted EBITDA beat estimates by 6.3% to hit $315.5 million.
However, investor sentiment turned cautious after management guided third-quarter adjusted EPS to a midpoint of $4.56 (below the $4.72 estimate) and EBITDA to a midpoint of $291.5 million (below the $299.2 million estimate). While the company did slightly lift its full-year revenue guidance to a midpoint of $7.57 billion, the light near-term forecast pressured the stock. This guidance-driven pressure overshadowed several positive developments during the quarter, including the board of directors authorizing a new $150 million share repurchase program and a total order backlog that grew 53% year-over-year to reach $12.24 billion.
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What Is The Market Telling Us
Dycom’s shares are quite volatile and have had 19 moves greater than 5% over the last year. But moves this big are rare even for Dycom and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 8.3% on the news that the company reported strong third-quarter 2025 results that surpassed expectations and provided an upbeat earnings forecast for the next quarter. The company posted contract revenue of $1.45 billion, a 14.1% increase from the same period last year, beating analyst estimates. Adjusted earnings per share came in at $3.63, which was 13% above consensus forecasts. This strong performance was driven by high demand for the installation of telecommunications infrastructure, such as fiber optic networks. Looking ahead, Dycom provided guidance for its fourth quarter, with its adjusted earnings per share forecast of $1.80 at the midpoint surpassing Wall Street's expectations of $1.60. The company's backlog of future work stood at $8.2 billion at the end of the quarter. This combination of a strong quarterly beat and a positive outlook sent the company's shares to an all-time high.
Dycom is down 10.1% since the beginning of the year, and at $312.33 per share, it is trading 41.6% below its 52-week high of $535.20 from May 2026. Despite the year-to-date decline, investors who bought $1,000 worth of Dycom’s shares 5 years ago would now be looking at an investment worth $4,117.
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