Looking back on energy products and services stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including FTAI Infrastructure (NASDAQ: FIP) and its peers.
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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 5.6%.
Luckily, energy products and services stocks have performed well with share prices up 38.6% on average since the latest earnings results.
Weakest Q2: 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 $122.3 million, up 44.1% year on year. This print fell short of analysts’ expectations by 9.8%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EBITDA estimates.
FTAI Infrastructure scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Still, the market seems discontent with the results. The stock is down 145% since reporting and currently trades at $5.41.
Read our full report on FTAI Infrastructure here, it’s free for active Edge members.
Best Q2: 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 $472.3 million, up 7.8% year on year, outperforming analysts’ expectations by 13%. The business had an exceptional quarter with a beat of analysts’ EPS and EBITDA estimates.
The market seems happy with the results as the stock is up 145% since reporting. It currently trades at $40.99.
Is now the time to buy Ameresco? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $351.2 million, up 1.9% year on year, exceeding analysts’ expectations by 15.9%. Still, it was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates and full-year EPS guidance missing analysts’ expectations.
MDU Resources delivered the biggest analyst estimates beat but had the slowest revenue growth in the group. Interestingly, the stock is up 14.4% since the results and currently trades at $20.
Read our full analysis of MDU Resources’s results here.
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 $6.77 billion, up 21.1% year on year. This print surpassed analysts’ expectations by 3.5%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Quanta delivered the highest full-year guidance raise among its peers. The stock is up 8.4% since reporting and currently trades at $445.68.
Read our full, actionable report on Quanta here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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