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EMCOR (EME) Q3 Earnings, Revenues Top, Stock Up on Solid View
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EMCOR Group Inc. (EME - Free Report) shares spiked 6.8% on Oct 28 after the company reported stellar results for third-quarter 2021. Adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate and grew on a year-over-year basis. The uptrend was mainly driven by robust demand for its services and prudent cost discipline.
Tony Guzzi, chairman, president, and CEO of EMCOR, said, “Despite recent supply chain challenges and continued COVID-related hurdles, we remain committed to delivering best-in-class services to our customers, maintaining a balanced capital allocation strategy, and driving long-term value for our shareholders. I am proud of our employees’ resilience and am confident that with our healthy balance sheet, robust project pipeline and disciplined execution, we are positioned for long-term sustainable growth.”
Earnings & Revenues
The company reported adjusted earnings of $1.85 per share, beating the consensus mark of $1.82 by 1.7%. Earnings increased 5.1% from the year-ago quarter.
EMCOR Group, Inc. Price, Consensus and EPS Surprise
Revenues totaled $2.52 billion, surpassing the consensus mark of $2.36 billion by 6.9% and improving 14.5% year over year.
Segment Details
The U.S. Construction segment revenues were up 12% year over year to $1.53 billion. Segment operating margin fell 90 basis points (bps) year over year.
Within the U.S. Construction umbrella, the U.S. Electrical Construction and Facilities Services segment revenues increased 11.8% year over year to $527.9 million. Operating income fell 4.1% and margin contracted 140 bps year over year. The U.S. Mechanical Construction and Facilities Services segment revenues rose 12.1% from a year ago to $999.6 million. Its operating income rose 2.8% but margin declined 80 bps year over year.
Revenues in the U.S. Building Services segment improved 13.6% to $632.5 million. Operating income decreased 17.8% and the margin was down 190 bps to 5% from the prior year.
The U.S. Industrial Services unit’s revenues increased 35.4% year over year to $232.2 million. The operating margin of negative 1.3% narrowed 390 bps from the prior-year figure of negative 5.2%.
The U.K. Building Services segment’s revenues gained 17.6% to $129.5 million. Operating income rose 23.6% and the operating margin grew 30 bps year over year.
Operating Highlights
Gross margins contracted 140 bps to 15.1% during the quarter. Selling, general and administrative expenses — as a percentage of revenues — were 9.7%, which improved 60 bps from the prior-year period.
Non-GAAP operating income for the quarter was $137.4 million, up 1.2% from the prior-year period. Adjusted operating margin of 5.4% contracted 80 bps from the prior-year period.
Liquidity & Cash Flow
As of Sep 30, 2021, the company had cash and cash equivalents of $663.9 million compared with $902.9 million at 2020-end. Long-term debt and finance lease obligations totaled $259.3 million, marking a slight decline from the 2020-end level of $259.6 million.
For the first nine months of 2021, EMCOR provided $113.9 million cash to operating activities compared with $546.8 million in the comparable year-ago period. As of Sep 30, 2021, the company had repurchased $137.3 million of its outstanding common stock under its current $200 million share repurchase program launched in March 2020.
2021 Guidance Raised
Backed by year-to-date performance, EMCOR lifted its 2021 guidance. The company now expects earnings per share within $6.95-$7.15 compared with $6.65-$7.05 projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $7.00.
EMCOR raised its revenue guidance to $9.80-$9.85 billion from the prior projection of approximately $9.50 billion. The consensus estimate for 2021 revenues is currently pegged at $9.52 billion.
Gibraltar Industries, Inc. (ROCK - Free Report) reported lackluster results for third-quarter 2021. Earnings and revenues missed the Zacks Consensus Estimate. Despite year-over-year growth in the top line, the bottom line fell due to intense inflationary pressure and supply-related woes.
Meritage Homes Corporation (MTH - Free Report) reported third-quarter 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate, defying the ongoing industry-wide supply-chain disruptions. Also, the top and the bottom line improved significantly on a year-over-year basis.
United Rentals, Inc. (URI - Free Report) reported lower-than-expected third-quarter 2021 results. Although the company’s earnings and revenues missed their respective Zacks Consensus Estimate, it raised full-year expectations for total revenues and adjusted EBITDA, given broad-based recovery of its end markets.
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EMCOR (EME) Q3 Earnings, Revenues Top, Stock Up on Solid View
EMCOR Group Inc. (EME - Free Report) shares spiked 6.8% on Oct 28 after the company reported stellar results for third-quarter 2021. Adjusted earnings and revenues surpassed the respective Zacks Consensus Estimate and grew on a year-over-year basis. The uptrend was mainly driven by robust demand for its services and prudent cost discipline.
Tony Guzzi, chairman, president, and CEO of EMCOR, said, “Despite recent supply chain challenges and continued COVID-related hurdles, we remain committed to delivering best-in-class services to our customers, maintaining a balanced capital allocation strategy, and driving long-term value for our shareholders. I am proud of our employees’ resilience and am confident that with our healthy balance sheet, robust project pipeline and disciplined execution, we are positioned for long-term sustainable growth.”
Earnings & Revenues
The company reported adjusted earnings of $1.85 per share, beating the consensus mark of $1.82 by 1.7%. Earnings increased 5.1% from the year-ago quarter.
EMCOR Group, Inc. Price, Consensus and EPS Surprise
EMCOR Group, Inc. price-consensus-eps-surprise-chart | EMCOR Group, Inc. Quote
Revenues totaled $2.52 billion, surpassing the consensus mark of $2.36 billion by 6.9% and improving 14.5% year over year.
Segment Details
The U.S. Construction segment revenues were up 12% year over year to $1.53 billion. Segment operating margin fell 90 basis points (bps) year over year.
Within the U.S. Construction umbrella, the U.S. Electrical Construction and Facilities Services segment revenues increased 11.8% year over year to $527.9 million. Operating income fell 4.1% and margin contracted 140 bps year over year. The U.S. Mechanical Construction and Facilities Services segment revenues rose 12.1% from a year ago to $999.6 million. Its operating income rose 2.8% but margin declined 80 bps year over year.
Revenues in the U.S. Building Services segment improved 13.6% to $632.5 million. Operating income decreased 17.8% and the margin was down 190 bps to 5% from the prior year.
The U.S. Industrial Services unit’s revenues increased 35.4% year over year to $232.2 million. The operating margin of negative 1.3% narrowed 390 bps from the prior-year figure of negative 5.2%.
The U.K. Building Services segment’s revenues gained 17.6% to $129.5 million. Operating income rose 23.6% and the operating margin grew 30 bps year over year.
Operating Highlights
Gross margins contracted 140 bps to 15.1% during the quarter. Selling, general and administrative expenses — as a percentage of revenues — were 9.7%, which improved 60 bps from the prior-year period.
Non-GAAP operating income for the quarter was $137.4 million, up 1.2% from the prior-year period. Adjusted operating margin of 5.4% contracted 80 bps from the prior-year period.
Liquidity & Cash Flow
As of Sep 30, 2021, the company had cash and cash equivalents of $663.9 million compared with $902.9 million at 2020-end. Long-term debt and finance lease obligations totaled $259.3 million, marking a slight decline from the 2020-end level of $259.6 million.
For the first nine months of 2021, EMCOR provided $113.9 million cash to operating activities compared with $546.8 million in the comparable year-ago period. As of Sep 30, 2021, the company had repurchased $137.3 million of its outstanding common stock under its current $200 million share repurchase program launched in March 2020.
2021 Guidance Raised
Backed by year-to-date performance, EMCOR lifted its 2021 guidance. The company now expects earnings per share within $6.95-$7.15 compared with $6.65-$7.05 projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $7.00.
EMCOR raised its revenue guidance to $9.80-$9.85 billion from the prior projection of approximately $9.50 billion. The consensus estimate for 2021 revenues is currently pegged at $9.52 billion.
Zacks Rank
EMCOR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Releases
Gibraltar Industries, Inc. (ROCK - Free Report) reported lackluster results for third-quarter 2021. Earnings and revenues missed the Zacks Consensus Estimate. Despite year-over-year growth in the top line, the bottom line fell due to intense inflationary pressure and supply-related woes.
Meritage Homes Corporation (MTH - Free Report) reported third-quarter 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate, defying the ongoing industry-wide supply-chain disruptions. Also, the top and the bottom line improved significantly on a year-over-year basis.
United Rentals, Inc. (URI - Free Report) reported lower-than-expected third-quarter 2021 results. Although the company’s earnings and revenues missed their respective Zacks Consensus Estimate, it raised full-year expectations for total revenues and adjusted EBITDA, given broad-based recovery of its end markets.