Dycom Industries Inc. popped to a record after raising its forecast for revenue for the current quarter and doubling the amount of its share repurchase program.
Dycom, which provides engineering and construction services for phone companies, expects to report sales of at least $560 million in the quarter ending July 25, up from an earlier forecast of $550 million, according to a statement Wednesday. The Palm Beach Gardens, Florida-based company also said it added $40 million to its stock buyback plan after nearly exhausting a previous authorization of the same size.
Jennifer Fritzsche, an analyst at a unit of Wells Fargo & Co., reiterated her buy rating on the stock, saying the company can expect steady revenue as its largest customer, AT&T Inc., expands its fiber-optics business.
“As the largest business providing engineering and construction services for fiber assets, we continue to view Dycom as a unique way to play on the fiber tsunami theme,” Fritzsche wrote in a note Wednesday.
Dycom, which also counts CenturyLink Inc. and Comcast Corp. among its customers, will benefit from pledges the companies have made to boost fiber infrastructure.
CenturyLink last week said “that ‘fiber is the future,’” Fritzsche wrote, while AT&T promised regulators it will add fiber to homes in the four years after it completes its purchase of DirecTV.
Dycom shares popped 7.9 percent, or $4.63, to $63.48 at 4 p.m. in New York. The stock surged 23 percent on May 20 after the company reported fiscal third-quarter results that topped estimates. Dycom is slated to disclose earnings for the fourth quarter on Aug. 26.