Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Quanta (NYSE: PWR) and the best and worst performers in the energy products and services industry.
Areas like the energy transition and emission reduction are thematic and front of mind today. This can be a double-edged sword for the energy products and services industry. Those who innovate and build new expertise can jolt demand while those who cling to legacy technologies or fall behind in the trending areas could see their market shares diminish. Bigger picture, energy products and services companies are still at the whim of construction and infrastructure project volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.
The 4 energy products and services stocks we track reported a softer Q4. As a group, revenues missed analysts’ consensus estimates by 11.7%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 25.3% since the latest earnings results.
Best Q4: Quanta (NYSE: PWR)
A construction engineering services company, Quanta (NYSE: PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.
Quanta reported revenues of $6.55 billion, up 13.3% year on year. This print fell short of analysts’ expectations by 1%, but it was still a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates.
"Quanta's fourth-quarter results reflect the strength of our business, delivering double-digit growth across key financial metrics, $575 million in free cash flow and record backlog. This caps another year of success, with record revenues, profits and cash flow, while maintaining a rock-solid balance sheet that positions us for continued strategic growth. I want to recognize the unwavering dedication of our Quanta family, whose expertise and commitment to excellence continues to drive our success," said Duke Austin, President and Chief Executive Officer of Quanta Services.
Quanta achieved the highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 13.4% since reporting and currently trades at $252.75.
We think Quanta is a good business, but is it a buy today? Read our full report here, it’s free.
Ameresco (NYSE: AMRC)
Having played a role in upgrading the energy solutions of Alcatraz Island, Ameresco (NYSE: AMRC) provides energy and renewable energy solutions for various sectors.
Ameresco reported revenues of $532.7 million, up 20.7% year on year, outperforming analysts’ expectations by 1.1%. The business performed better than its peers, but it was unfortunately a slower quarter with full-year EBITDA guidance missing analysts’ expectations.
Ameresco pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 43% since reporting. It currently trades at $10.42.
Is now the time to buy Ameresco? Access our full analysis of the earnings results here, it’s free.
Slowest Q4: FTAI Infrastructure (NASDAQ: FIP)
Spun off from FTAI Aviation in 2021, FTAI Infrastructure (NASDAQ: FIP) invests in and operates infrastructure and related assets across the transportation and energy sectors.
FTAI Infrastructure reported revenues of $80.76 million, flat year on year, falling short of analysts’ expectations by 14.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 35.1% since the results and currently trades at $3.69.
Read our full analysis of FTAI Infrastructure’s results here.
MDU Resources (NYSE: MDU)
Founded to provide electricity to towns in Minnesota, MDU Resources (NYSE: MDU) provides products and services in the utilities and construction materials industries.
MDU Resources reported revenues of $535.5 million, down 52.8% year on year. This number came in 32.3% below analysts' expectations. It was a disappointing quarter as it also logged full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
MDU Resources had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 9.5% since reporting and currently trades at $16.25.
Read our full, actionable report on MDU Resources here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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