Primoris Services Corp (PRIM) experienced a dramatic 35.5% drop in premarket trading on Tuesday, following a significant reduction in its 2026 profit forecast and the announcement that its Chief Operating Officer, Jeremy Kinch, had left the company. The infrastructure firm's revised outlook underscores persistent challenges within its renewable energy segment, which have now spilled into the current year.
Guidance Slashed Amid Renewables Woes
The Dallas-based company now expects adjusted EBITDA for 2026 to fall between $275 million and $325 million, a sharp decline from the previous projection of $480 million to $500 million. Net income guidance was also cut to $71 million to $101 million, down from $223 million to $234 million. Earnings per share are now anticipated in the range of $1.30 to $1.85, compared to the earlier forecast of $4.05 to $4.25. Adjusted EPS was lowered to $2.05-$2.60 from $4.80-$5.00.
Primoris attributed the new pressure primarily to six previously disclosed renewable energy projects. Two of these projects were completed in the second quarter, while the remaining four are expected to be finished between early Q3 and the end of Q4. The company also reduced its 2026 renewables revenue outlook to approximately $2.1 billion, down from about $3.0 billion in 2025.
Operational Challenges and Leadership Change
In the first quarter, Primoris reported a 62.2% year-over-year decline in Energy segment operating income, citing lower revenue and higher costs on certain renewables projects. Factors such as redesigns, sequencing shifts, labor issues, and adverse weather were highlighted as key contributors. The company's Chief Operating Officer, Jeremy Kinch, exited on June 22, with CEO Koti Vadlamudi assuming most COO responsibilities while a search for a permanent replacement is underway. The departure was classified as a termination without cause, unrelated to financial or accounting matters.
Analyst Reactions and Market Impact
Several analysts adjusted their ratings and price targets following the news. KeyBanc downgraded Primoris to Sector Weight from Overweight, citing the stock as "tough to defend" after another guidance cut. Mizuho's Maheep Mandloi reduced the price target to $117 from $135 but maintained an Outperform rating, citing continued "strong" bookings. Wells Fargo's Jerry Revich cut the target to $85 from $118, reiterating an Equal Weight rating and noting "risk of higher project losses" in the second half of the year.
The broader market also showed weakness, with S&P 500 futures down 1.34% and Dow futures slipping 0.50%. However, Primoris stood out as one of the session's biggest losers.
Segment Performance and Outlook
Despite the setbacks, Primoris reported approximately $2 billion in Energy segment wins for the second quarter, including natural gas generation projects, industrial jobs, and electric construction for power load growth and data centers. CEO Vadlamudi expressed disappointment over the additional costs but emphasized strong demand across end markets. The company is scheduled to present at the J.P. Morgan Natural Resources Conference in New York on June 24, where management is expected to provide further clarity.
The risk for Primoris extends beyond Tuesday's opening. If renewables projects continue to incur losses or cost estimates remain under pressure, the newly revised 2026 outlook may face further scrutiny. Second-quarter results will be a critical test, as management indicated that most recent changes should become clearer by then.
