Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Granite Construction (NYSE: GVA) 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 11 construction and maintenance services stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.5% 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 3.5% on average since the latest earnings results.
Granite Construction (NYSE: GVA)
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE: GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Granite Construction reported revenues of $1.13 billion, up 4% year on year. This print fell short of analysts’ expectations by 3%, but it was still a strong quarter for the company with full-year revenue guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
"In the second quarter, we capitalized on the strong bidding opportunities we are seeing in both the public and private markets and increased our CAP to $6.1 billion, which is a new record,” said Kyle Larkin, Granite President and Chief Executive Officer.
Granite Construction delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 17.2% since reporting and currently trades at $109.45.
Best Q2: 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 $1.89 billion, up 20.9% year on year, outperforming analysts’ expectations by 12.1%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Primoris delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.2% since reporting. It currently trades at $111.09.
Is now the time to buy Primoris? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $589.1 million, down 2.6% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EPS estimates.
WillScot Mobile Mini delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 16.6% since the results and currently trades at $24.49.
Read our full analysis of WillScot Mobile Mini’s results here.
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. This result topped analysts’ expectations by 10.6%. Overall, it was an incredible quarter as it also logged a solid beat of analysts’ backlog estimates and a beat of analysts’ EPS estimates.
The stock is up 21.6% since reporting and currently trades at $684.09.
Read our full, actionable report on Comfort Systems here, it’s free.
APi (NYSE: APG)
Started in 1926 as an insulation contractor, APi (NYSE: APG) provides life safety solutions and specialty services for buildings and infrastructure.
APi reported revenues of $1.99 billion, up 15.1% year on year. This print beat analysts’ expectations by 5.1%. It was a very strong quarter as it also put up a solid beat of analysts’ organic revenue estimates and full-year revenue guidance exceeding analysts’ expectations.
The stock is up 3.8% since reporting and currently trades at $35.77.
Read our full, actionable report on APi 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.
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