Emcor Group (EME) came out with quarterly earnings of $5.41 per share, beating the Zacks Consensus Estimate of $4.57 per share. This compares to earnings of $4.17 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 18.38%. A quarter ago, it was expected that this construction and maintenance company would post earnings of $5.54 per share when it actually produced earnings of $6.32, delivering a surprise of 14.08%.Over the last fou ...

FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL DISCLOSURES Forward-Looking Statements First Quarter 2025 Earnings Call April 30, 2025 FIRST QUARTER 2025 FINANCIAL RESULTS This presentation and related press release contain forward-looking statements. Such statements speak only as of the date on the cover of this slide deck, and EMCOR assumes no obligation to update any such forward-looking statements, unless required by law. These forward-looking statements include statements regarding anticipated future ...

Financial Performance - Revenues for Q1 2025 reached $3,867,372, an increase of 12.7% compared to $3,432,276 in Q1 2024[15] - Gross profit for Q1 2025 was $722,718, representing a 22.5% increase from $589,309 in Q1 2024[15] - Net income for Q1 2025 was $240,677, up 22.0% from $197,149 in Q1 2024[15] - Basic earnings per share increased to $5.27 in Q1 2025, compared to $4.18 in Q1 2024, reflecting a 26.1% growth[15] - Operating income for Q1 2025 was $318,756, a 22.5% increase from $259,953 in Q1 2024[15] - Comprehensive income for Q1 2025 was $246,496, compared to $196,417 in Q1 2024, indicating a 25.5% increase[16] - Consolidated operating income for Q1 2025 was $318.8 million, up 22.6% from $259.9 million in Q1 2024[116] Cash Flow and Investments - Cash flows from operating activities for Q1 2025 were $108,471, a decrease from $132,264 in Q1 2024[18] - The company made significant investments in acquisitions, totaling $850,644 in Q1 2025, compared to only $100 in Q1 2024[18] - The cash balance at the end of Q1 2025 was $577,465, down from $842,487 at the end of Q1 2024[18] - Total capital expenditures for Q1 2025 were $26.1 million, a 28.8% increase from $20.3 million in Q1 2024[117] Revenue Recognition and Segments - The company recognizes revenue when it transfers promised goods or services to customers, applying a five-step model to determine revenue recognition[28] - Total segment revenues for the three months ended March 31, 2025, reached $3,867.4 million, a 12.7% increase from $3,432.3 million in the same period of 2024[52] - The United States electrical construction and facilities services segment generated revenues of $1,087.8 million, up from $764.7 million, representing a 42.4% year-over-year growth[50] - The United States mechanical construction and facilities services segment reported revenues of $1,572.6 million, an increase of 10.1% compared to $1,427.7 million in 2024[51] - The United States building services segment's revenues decreased to $742.6 million from $781.2 million, reflecting a decline of 4.9%[52] - The United States industrial services segment achieved revenues of $359.0 million, slightly up from $354.1 million, indicating a growth of 1.1%[52] Acquisitions and Goodwill - The acquisition of Miller Electric Company contributed $183.1 million in revenues and $12.7 million in operating income for the period from February 3, 2025, to March 31, 2025[67] - Total assets acquired in the recent acquisition amounted to $1,104,945 thousand, with identifiable intangible assets valued at $475,000 thousand[68] - Goodwill from the acquisition is calculated at $317,354 thousand, representing future economic benefits expected from the strategic acquisition[70] - The company acquired seven businesses in 2024 for a total upfront consideration of $231,100 thousand, including $61,900 thousand attributed to goodwill and $139,100 thousand to identifiable intangible assets[73] Debt and Financial Position - Total debt as of March 31, 2025, was $257,014 thousand, significantly up from $6,095 thousand as of December 31, 2024, primarily due to borrowings under the 2023 Revolving Credit Facility[78] - The company had $250,000 thousand in direct borrowings outstanding under the 2023 Revolving Credit Facility as of March 31, 2025, with no borrowings as of December 31, 2024[80] - Total assets increased to $8.08 billion as of March 31, 2025, compared to $7.72 billion at the end of 2024, reflecting a growth of 4.7%[118] Tax and Regulatory Matters - The income tax provision for the three months ended March 31, 2025, was $83,520, up from $70,567 in 2024, reflecting an increase of approximately 18.3%[93] - The effective income tax rate decreased to 25.8% for the three months ended March 31, 2025, compared to 26.4% in 2024, primarily due to favorable discrete tax items[94] - The company had no unrecognized income tax benefits as of March 31, 2025, and is currently under examination for tax returns from 2020 to 2023[95] Market Risks - The company is exposed to market risks related to fluctuations in commodity prices, particularly for materials like copper and steel, which could impact profitability[181]

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Core Viewpoint - EMCOR Group, Inc. and MasTec, Inc. are both prominent players in the infrastructure engineering and construction services sector, benefiting from increased demand for large-scale infrastructure projects driven by public and private investments in data centers, renewable energy, and 5G telecommunications [1][2]. Company Performance EMCOR Group, Inc. (EME) - EMCOR reported record results for 2024, with revenue increasing by 15.8% to $14.57 billion and net income rising by 59% to $1.01 billion, resulting in earnings per share (EPS) of $21.52, a 61.7% increase from 2023 [5]. - The company's Remaining Performance Obligations (RPOs) reached an all-time high of $10.1 billion, up 14.2% year over year, indicating strong revenue visibility into 2025 [3][5]. - EMCOR's operating margin for Q4 2024 was 10.3%, an increase of 190 basis points from the previous year, reflecting effective project execution and cost controls [5]. - The company has consistently beaten earnings estimates, averaging a 29% upside surprise over the last four quarters [6]. - EMCOR's strategic acquisition of Miller Electric for $865 million is expected to enhance its presence in high-growth sectors and contribute approximately $805 million in annual revenues [7]. - As of early 2025, EMCOR held a cash position of $1.34 billion and increased its share repurchase authorization by $500 million, demonstrating financial strength and flexibility [8]. MasTec, Inc. (MTZ) - MasTec experienced a turnaround in 2024, reporting revenues of $12.3 billion, a modest increase from $12.0 billion in 2023, and a net income of $199 million [9]. - The adjusted EPS for MasTec in 2024 was approximately $3.95, more than double the previous year's result, indicating a strong recovery in profitability [9]. - MasTec's adjusted EBITDA margins improved to 8% by Q4 2024, up 110 basis points from the previous year, supported by operational improvements and successful integration of acquisitions [11]. - The company ended 2024 with a record 18-month backlog of $14.3 billion, reflecting a 15% increase year over year, which provides strong revenue visibility and growth potential for 2025 [11]. - MasTec has also consistently exceeded earnings estimates, with an average EPS surprise of 31.6% over the last four quarters [12]. Market Performance - EMCOR shares increased by approximately 110% in 2024 but have since declined by 15.3% year to date due to broader market volatility and concerns over margin sustainability [14]. - MasTec's stock gained around 80% in 2024 but has also pulled back by about 13% year to date, influenced by macroeconomic concerns and the company's investment phase [15]. - Both companies have outperformed the Zacks Building Products - Heavy Construction industry in the current year [15]. Valuation and Growth Estimates - EMCOR's forward 12-month price-to-earnings (P/E) ratio is about 16X, in line with the industry average, while MasTec's is closer to 20X, suggesting that EMCOR may offer better value [21]. - EMCOR's trailing 12-month return on equity (ROE) is 36.4%, significantly higher than the industry average of 15.5% and MasTec's 11.2% [25]. - Analysts have become increasingly optimistic about both companies' earnings potential, with upward revisions in EPS estimates for 2025 [18]. Conclusion - EMCOR is positioned as a more attractive short-term investment due to its balanced fundamental profile, superior execution, and strong returns, while MasTec, despite its high growth potential, carries a higher risk/reward profile due to elevated stock valuation [26][27].

Group 1: Construction and Industrial Products Sector - Several construction and industrial products sector stocks are expected to perform well as spring and summer approach, which are peak seasons for industrial production [1] - Tariffs may impact construction activities, but highly ranked stocks appear to have priced in the potential risks associated with higher imported materials [1] Group 2: EMCOR Group (EME) - EMCOR Group's stock is currently priced at $375 per share, having fallen 31% from a 52-week high of $545 [2] - Total sales for EMCOR are projected to increase by 13% in fiscal 2025 and by another 4% in fiscal 2026, reaching $17.19 billion [2] - Annual earnings for EMCOR are expected to rise by 8% this year and by another 9% in fiscal 2026, reaching $25.40 per share [3] - EMCOR trades at a forward earnings multiple of 15.1X and less than 2X sales, indicating reasonable valuation [3] Group 3: Meritage Homes (MTH) - Meritage Homes is trading near its 52-week low of $59 per share and has a forward earnings ratio of just 7X, which is below the industry average and the S&P 500's 20.8X [5] - The company offers a 2.58% annual dividend yield, making it attractive for investors [5] - EPS for Meritage was $21.44 last year, but earnings are expected to contract, making the current dip an appealing buying opportunity [7] - Earnings estimates for the current year show a significant year-over-year decline of 56.44% [8] Group 4: Sterling Infrastructure (STRL) - Sterling Infrastructure has seen limited buy-the-dip opportunities due to rapid expansion in U.S. infrastructure, particularly in data center manufacturing [9] - The stock is currently trading just over $130, down 21% year-to-date but has increased by 3,000% over the last decade [10] - Recent advancements in AI have led to increased demand for Sterling's data center solutions, alongside new interstate roadway projects in Utah and Colorado [10] Group 5: Market Outlook - With construction activities expected to increase in the warmer months, there is potential for significant upside in the stocks of EMCOR Group, Meritage Homes, and Sterling Infrastructure [12]

Group 1 - Emcor Group's stock closed at $354.39, showing a +1.12% change, outperforming the S&P 500's daily loss of 1.57% [1] - Over the past month, Emcor Group's shares have decreased by 2.96%, which is better than the Construction sector's loss of 11.78% and the S&P 500's loss of 12.16% [1] Group 2 - The upcoming earnings disclosure for Emcor Group is anticipated, with projected earnings per share (EPS) of $4.57, reflecting a 9.59% increase year-over-year [2] - Revenue is expected to reach $3.8 billion, indicating a 10.6% growth compared to the same quarter last year [2] Group 3 - For the full year, earnings are projected at $23.37 per share and revenue at $16.43 billion, showing increases of +8.6% and +12.77% respectively from the previous year [3] - Recent changes in analyst estimates suggest optimism regarding Emcor Group's business and profitability [3] Group 4 - The Zacks Rank system indicates that Emcor Group currently holds a rank of 1 (Strong Buy), which has historically outperformed with an average annual return of +25% since 1988 [5] - The Zacks Consensus EPS estimate has remained stable over the past month [5] Group 5 - Emcor Group has a Forward P/E ratio of 15, which is a premium compared to the industry average of 13.1 [6] - The Building Products - Heavy Construction industry, part of the Construction sector, holds a Zacks Industry Rank of 72, placing it in the top 30% of over 250 industries [6]

Core Viewpoint - Emcor Group (EME) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in a company's earnings picture, with the Zacks Consensus Estimate reflecting EPS estimates from sell-side analysts [1][2]. - A strong correlation exists between earnings estimate revisions and near-term stock price movements, driven by institutional investors who adjust their valuations based on these estimates [4][6]. Emcor Group's Earnings Outlook - Emcor Group is projected to earn $23.37 per share for the fiscal year ending December 2025, representing an 8.6% year-over-year increase [8]. - Over the past three months, the Zacks Consensus Estimate for Emcor Group has risen by 5.1%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Emcor Group's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term [10].

EMCOR Group (EME) has delivered a remarkable 142.6% return over the past two years, demonstrating strong long-term performance. However, the stock has hit a rough patch recently, plummeting 15.2% year to date (YTD). The stock even performed below the broader Construction sector’s 9% decline and the S&P 500’s 4.7% decrease.EME’s Share PerformanceImage Source: Zacks Investment ResearchNonetheless, EME stock has performed somewhat better than the Zacks Building Products - Heavy Construction industry’s 15.7% de ...

Core Viewpoint - Emcor Group (EME) shares have declined approximately 5.8% since the last earnings report, underperforming the S&P 500, raising questions about the potential for a breakout or continued negative trend leading up to the next earnings release [1] Group 1: Earnings and Estimates - Fresh estimates for Emcor Group have trended downward over the past month, indicating a negative shift in expectations [2] - The most recent earnings report is essential for understanding the key drivers affecting the company's performance [1] Group 2: VGM Scores - Emcor Group currently holds a strong Growth Score of A, while its Momentum Score is rated B, and it has a Value Score of B, placing it in the top 40% for this investment strategy [3] - The aggregate VGM Score for the stock is A, which is significant for investors not focused on a single strategy [3] Group 3: Outlook - The downward trend in estimates suggests a broader negative outlook for the stock, although Emcor Group maintains a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [4]