Wrapping up Q3 earnings, we look at the numbers and key takeaways for the construction and maintenance services stocks, including Comfort Systems (NYSE: FIX) and its peers.
Construction and maintenance services companies not only boast technical know-how in specialized areas but also may hold special licenses and permits. Those who work in more regulated areas can enjoy more predictable revenue streams - for example, fire escapes need to be inspected every five years. More recently, services to address energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and maintenance services companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives incremental demand for these companies’ offerings.
The 12 construction and maintenance services stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 2.5% on average since the latest earnings results.
Comfort Systems (NYSE: FIX)
Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $2.45 billion, up 35.2% year on year. This print exceeded analysts’ expectations by 13.2%. Overall, it was an incredible quarter for the company with a solid beat of analysts’ backlog estimates and a beat of analysts’ EPS estimates.
Brian Lane, Comfort Systems USA’s President and Chief Executive Officer, said, “Our teams across the country continue to set a new standard, delivering excellent results for our customers, and again achieving record financial results. Great ongoing execution and favorable developments in certain late-stage projects delivered third quarter EPS that doubles our same quarter last year. In addition to increased revenue and earnings, we are also reporting remarkable quarterly cash flow of over $550 million.”
Interestingly, the stock is up 15.1% since reporting and currently trades at $949.93.
Primoris (NYSE: PRIM)
Listed on the NASDAQ in 2008, Primoris (NYSE: PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
Primoris reported revenues of $2.18 billion, up 32.1% year on year, outperforming analysts’ expectations by 17.7%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.
Primoris delivered the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 10.6% since reporting. It currently trades at $128.06.
Is now the time to buy Primoris? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: WillScot Mobile Mini (NASDAQ: WSC)
Originally focusing on mobile offices for construction sites, WillScot (NASDAQ: WSC) provides ready-to-use temporary spaces, largely for longer-term lease.
WillScot Mobile Mini reported revenues of $566.8 million, down 5.8% year on year, falling short of analysts’ expectations by 2.3%. It was a softer quarter as it posted a miss of analysts’ Delivery and Installation revenue estimates and revenue guidance for next quarter missing analysts’ expectations significantly.
WillScot Mobile Mini delivered the slowest revenue growth in the group. As expected, the stock is down 2.1% since the results and currently trades at $19.14.
Read our full analysis of WillScot Mobile Mini’s results here.
Orion (NYSE: ORN)
Established in 1994, Orion (NYSE: ORN) provides construction services for marine infrastructure and industrial projects.
Orion reported revenues of $225.1 million, flat year on year. This result met analysts’ expectations. It was a strong quarter as it also logged a beat of analysts’ EPS estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
The stock is up 14.6% since reporting and currently trades at $9.94.
Read our full, actionable report on Orion here, it’s free for active Edge members.
Great Lakes Dredge & Dock (NASDAQ: GLDD)
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ: GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Great Lakes Dredge & Dock reported revenues of $195.2 million, up 2.1% year on year. This number lagged analysts' expectations by 3%. Zooming out, it was actually a strong quarter as it put up a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 15.4% since reporting and currently trades at $13.14.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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