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Dycom Signals Ration Is Returning to Telecom Infrastructure Market

Specialty contractor’s margins benefit as market participants finally take and accept price.

August 26, 2022

Dycom Industries (DY), a specialty contractor serving the telecommunications industry, is signaling ration is slowly returning to the market. Following a boilerplate warning of price increases for capital equipment— particularly large truck chassis required for fiber optic cable installation— Dycom inserted new language in its latest quarterly fling suggesting market participants are finally passing along or adjusting to higher prices:

“...we are encouraged that industry participants increasingly understand that cost pressures are industry wide. Several have addressed those impacts while others are expected to do so as well.”

The company didn’t single out competitors who may have been eating higher costs or customers who have been hesitant to accept higher prices. Gross margin in the latest quarter improved 63 basis points sequentially.

Expect additional margin expansion if Dycom’s market maintains its newfound rationality.

Related: MTZ, LAM, AEGN

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