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EMCOR's (EME) Q3 Earnings and Revenues Beat, Guidance Raised
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EMCOR Group Inc.’s (EME - Free Report) third-quarter 2018 top and bottom lines surpassed the Zacks Consensus Estimate. In fact, the quarter saw the seventh consecutive earnings beat by the company.
Adjusted earnings were $1.36 per share, beating the consensus mark of $1.22 by 11.5%. The reported figure also improved 24.8% from the quarter year-ago buoyed by improved margins across all segments. The improvement was driven by continued strength in U.S. Industrial segments along with robust performance of the U.K. Building Services segment.
The company generated a record $2.05 billion in revenues, which edged up 8.5% year over year and surpassed the Zacks Consensus Estimate of $1.95 million.
Segment Details
The U.S. Construction segment (up 3.3% year over year) maintained its robust momentum on strong revenues. The U.S. Electrical Construction segment revenues rose 6.1% year over year and the U.S. Mechanical Construction segment’s revenues increased 1.6% in the quarter.
The company’s U.S. Building Services segment revenues rose 8.4% year over year backed by strong execution in government, mechanical and energy services businesses.
The U.S. Industrial Services revenues increased 47.2% year over year after recovery from Hurricane Harvey’s impact.
Revenues from total U.S. operations grew 8.1% year over year to $1.95 billion.
The U.K. Building Services segment maintained its growth trajectory, with revenues increasing 17.1% year over year on continued project activity.
EMCOR Group, Inc. Price, Consensus and EPS Surprise
EMCOR’s operating income was $111.8 million, up from $106 million in the prior-year quarter. Operating margin was 5.5%, down 10 basis points from the prior-year figure of 5.6%.
Liquidity & Cash Flow
EMCOR’s cash and cash equivalents totaled $353.9 million as of Sep 30, 2018, compared with $467.4 million as on Dec 31, 2017. Long-term debt and capital lease obligations came in at $258.6 million, down from $269.8 million recorded on Dec 31, 2017.
As of Sep 30, 2018, cash flow used in operating activities totaled $65.9 million against cash flow provided by operating activities of $238.3 million a year ago.
Share Repurchase Program
The board has approved a new share repurchase program that authorizes the company to buy back an additional share worth $200 million. Of late, the company had repurchased shares worth $20.9 million under its $100-million share buy-back program launched in October 2017.
2018 Guidance Raised
Buoyed by solid market conditions and favorable project mix, EMCOR raised its expectation for current-year earnings as well as revenues. The company now expects earnings from continuing operations within $4.75 to $4.90 a share compared with $4.40 to $4.80 expected earlier.
EMCOR lifted its revenue expectation to $7.9 billion from the prior guidance of $7.8 billion.
North American Construction has an expected earnings growth rate of 235.71% for 2018.
MasTec has an expected earnings growth rate of 25% for 2018.
Armstrong World is expected to see EPS growth of 23.51% this year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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EMCOR's (EME) Q3 Earnings and Revenues Beat, Guidance Raised
EMCOR Group Inc.’s (EME - Free Report) third-quarter 2018 top and bottom lines surpassed the Zacks Consensus Estimate. In fact, the quarter saw the seventh consecutive earnings beat by the company.
Adjusted earnings were $1.36 per share, beating the consensus mark of $1.22 by 11.5%. The reported figure also improved 24.8% from the quarter year-ago buoyed by improved margins across all segments. The improvement was driven by continued strength in U.S. Industrial segments along with robust performance of the U.K. Building Services segment.
The company generated a record $2.05 billion in revenues, which edged up 8.5% year over year and surpassed the Zacks Consensus Estimate of $1.95 million.
Segment Details
The U.S. Construction segment (up 3.3% year over year) maintained its robust momentum on strong revenues. The U.S. Electrical Construction segment revenues rose 6.1% year over year and the U.S. Mechanical Construction segment’s revenues increased 1.6% in the quarter.
The company’s U.S. Building Services segment revenues rose 8.4% year over year backed by strong execution in government, mechanical and energy services businesses.
The U.S. Industrial Services revenues increased 47.2% year over year after recovery from Hurricane Harvey’s impact.
Revenues from total U.S. operations grew 8.1% year over year to $1.95 billion.
The U.K. Building Services segment maintained its growth trajectory, with revenues increasing 17.1% year over year on continued project activity.
EMCOR Group, Inc. Price, Consensus and EPS Surprise
EMCOR Group, Inc. Price, Consensus and EPS Surprise | EMCOR Group, Inc. Quote
Operating Highlights
EMCOR’s operating income was $111.8 million, up from $106 million in the prior-year quarter. Operating margin was 5.5%, down 10 basis points from the prior-year figure of 5.6%.
Liquidity & Cash Flow
EMCOR’s cash and cash equivalents totaled $353.9 million as of Sep 30, 2018, compared with $467.4 million as on Dec 31, 2017. Long-term debt and capital lease obligations came in at $258.6 million, down from $269.8 million recorded on Dec 31, 2017.
As of Sep 30, 2018, cash flow used in operating activities totaled $65.9 million against cash flow provided by operating activities of $238.3 million a year ago.
Share Repurchase Program
The board has approved a new share repurchase program that authorizes the company to buy back an additional share worth $200 million. Of late, the company had repurchased shares worth $20.9 million under its $100-million share buy-back program launched in October 2017.
2018 Guidance Raised
Buoyed by solid market conditions and favorable project mix, EMCOR raised its expectation for current-year earnings as well as revenues. The company now expects earnings from continuing operations within $4.75 to $4.90 a share compared with $4.40 to $4.80 expected earlier.
EMCOR lifted its revenue expectation to $7.9 billion from the prior guidance of $7.8 billion.
Zacks Rank & Other Key Picks
EMCOR currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in Construction sector are North American Construction Group Ltd. (NOA - Free Report) , MasTec, Inc. (MTZ - Free Report) and Armstrong World Industries, Inc. (AWI - Free Report) . While North American Construction Group sports a Zacks Rank #1 (Strong Buy), MasTec and Armstrong World carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
North American Construction has an expected earnings growth rate of 235.71% for 2018.
MasTec has an expected earnings growth rate of 25% for 2018.
Armstrong World is expected to see EPS growth of 23.51% this year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>