As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the construction and maintenance services industry, including Tutor Perini (NYSE: TPC) 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 13 construction and maintenance services stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.5% while next quarter’s revenue guidance was in line.
Luckily, construction and maintenance services stocks have performed well with share prices up 11% on average since the latest earnings results.
Tutor Perini (NYSE: TPC)
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE: TPC) is a civil and building construction company offering diversified general contracting and design-build services.
Tutor Perini reported revenues of $1.37 billion, up 21.8% year on year. This print exceeded analysts’ expectations by 8.5%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
Interestingly, the stock is up 35.7% since reporting and currently trades at $64.12.
Is now the time to buy Tutor Perini? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: 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 $2.17 billion, up 20.1% year on year, outperforming analysts’ expectations by 10.6%. The business had an incredible quarter with an impressive beat of analysts’ backlog and EPS estimates.
The market seems happy with the results as the stock is up 50.9% since reporting. It currently trades at $849.
Is now the time to buy Comfort Systems? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Matrix Service (NASDAQ: MTRX)
Founded in Oklahoma, Matrix Service (NASDAQ: MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Matrix Service reported revenues of $216.4 million, up 14.2% year on year, falling short of analysts’ expectations by 6.8%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.
Matrix Service delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. As expected, the stock is down 8.7% since the results and currently trades at $13.
Read our full analysis of Matrix Service’s results here.
Concrete Pumping (NASDAQ: BBCP)
Going public via SPAC in 2018, Concrete Pumping (NASDAQ: BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Concrete Pumping reported revenues of $103.7 million, down 5.4% year on year. This number beat analysts’ expectations by 3.3%. It was a strong quarter as it also put up an impressive beat of analysts’ revenue estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Concrete Pumping had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is up 2.4% since reporting and currently trades at $6.95.
Read our full, actionable report on Concrete Pumping here, it’s free for active Edge members.
MYR Group (NASDAQ: MYRG)
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ: MYRG) is a specialty contractor in the electrical construction industry.
MYR Group reported revenues of $900.3 million, up 8.6% year on year. This print topped analysts’ expectations by 6%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ revenue estimates.
The stock is up 3.3% since reporting and currently trades at $207.
Read our full, actionable report on MYR Group here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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