Spotting Winners: Great Lakes Dredge & Dock (NASDAQ:GLDD) And Construction and Maintenance Services Stocks In Q3

January 07, 2025 at 04:03 AM EST

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As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the construction and maintenance services industry, including Great Lakes Dredge & Dock (NASDAQ: GLDD) 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 slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.

Luckily, construction and maintenance services stocks have performed well with share prices up 10.3% on average since the latest earnings results.

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 $191.2 million, up 63.1% year on year. This print exceeded analysts’ expectations by 3.5%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.

Lasse Petterson, President and Chief Executive Officer, commented, “Great Lakes had a solid third quarter with strong project performance and substantial project wins in the bid market. During the quarter, Great Lakes was awarded $543.0 million of new work, including three port deepening projects capturing 81% of the third quarter capital market and six beach renourishment projects capturing 79% of the quarter’s coastal protection market. The largest project bid in the quarter was the Sabine-Neches Contract 6 Deepening project, won by Great Lakes, with awarded base and open options totaling $235 million. We ended the third quarter with a record backlog of $1.21 billion and an additional $465.0 million in low bids and options pending, which provides us utilization and revenue visibility well into 2026. Post quarter end, Great Lakes was awarded two projects for a total of $90 million, which were in low bids pending award at the end of the third quarter.

Great Lakes Dredge & Dock achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 27% since reporting and currently trades at $11.36.

Read our full report on Great Lakes Dredge & Dock here, it’s free.

Best Q3: Limbach (NASDAQ: LMB)

Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.

Limbach reported revenues of $133.9 million, up 4.8% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with an impressive beat of analysts’ EPS and EBITDA estimates.

Limbach delivered the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 27% since reporting. It currently trades at $99.06.

Is now the time to buy Limbach? Access our full analysis of the earnings results here, it’s free.

Slowest Q3: 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 $1.08 billion, up 2.1% year on year, falling short of analysts’ expectations by 7.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

Tutor Perini delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 16.7% since the results and currently trades at $25.22.

Read our full analysis of Tutor Perini’s results here.

Construction Partners (NASDAQ: ROAD)

Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.

Construction Partners reported revenues of $538.2 million, up 13.3% year on year. This print was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also recorded full-year EBITDA guidance beating analysts’ expectations but a miss of analysts’ EPS estimates.

The stock is up 3.3% since reporting and currently trades at $94.32.

Read our full, actionable report on Construction Partners here, it’s free.

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 $1.81 billion, up 31.5% year on year. This print lagged analysts' expectations by 1.6%. More broadly, it was a mixed quarter as it also produced a solid beat of analysts’ adjusted operating income estimates but a miss of analysts’ backlog estimates.

The stock is up 9.1% since reporting and currently trades at $451.02.

Read our full, actionable report on Comfort Systems here, it’s free.

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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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