Core Insights - EMCOR Group, Inc. reported strong first-quarter 2025 results, with adjusted earnings and revenues exceeding expectations and showing year-over-year growth [1][3][6] - The company's performance benefited from virtual design and construction technologies, prefabrication capabilities, and the acquisition of Miller Electric [1][2] Financial Performance - Adjusted earnings per share (EPS) reached $5.41, surpassing the Zacks Consensus Estimate of $4.57 by 18.4%, compared to $4.17 in the same quarter last year [3] - Revenues totaled $3.87 billion, exceeding the consensus estimate of $3.8 billion by 1.9% and increasing 12.7% from $3.43 billion year-over-year [6] Segment Performance - U.S. Construction Services segment revenues grew 21.3% year-over-year to $2.66 billion, with operating income increasing by 33.2% and margin expanding to 12.1% [7] - U.S. Electrical Construction and Facilities Services revenues rose 42.3% year-over-year to $1.09 billion, with operating income up 48.6% and margin at 12.5% [8] - U.S. Mechanical Construction and Facilities Services revenues increased 10.2% year-over-year to $1.57 billion, with operating income rising 23.9% and margin at 11.9% [9] - U.S. Building Services revenues decreased 4.9% year-over-year to $742.6 million, while operating income grew 8.9% [9] - U.S. Industrial Services revenues inched up 1.4% year-over-year to $359 million, but operating income dropped 62.4% [10] - U.K. Building Services revenues increased 0.6% year-over-year to $105.3 million, with operating income falling 7.3% [10] Operating Metrics - Gross margin expanded 150 basis points year-over-year to 18.7%, while operating margin improved to 8.2% from 7.6% [11] - Selling, general and administrative expenses as a percentage of revenues increased by 80 basis points to 10.4% [11] Liquidity and Cash Flow - As of March 31, 2025, cash and cash equivalents stood at $576.7 million, down from $1.34 billion at the end of 2024 [12] - Net cash provided by operating activities was $108.5 million, compared to $132.3 million in the prior year [12] - Remaining performance obligations (RPOs) increased year-over-year to $11.75 billion from $9.18 billion [12] Outlook - EMCOR expects annual revenues to be between $16.1 billion and $16.9 billion, with EPS projected in the range of $22.65 to $24.00 [13]

[First Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20and%20Operational%20Highlights) This section details EMCOR's record Q1 2025 revenues, net income, and EPS, alongside strong operating performance, record RPOs, and segment-specific contributions [Consolidated Financial Results](index=1&type=section&id=Consolidated%20Financial%20Results) EMCOR Group, Inc. reported record revenues and diluted EPS for Q1 2025, driven by strong year-over-year growth, with non-GAAP figures adjusted for acquisition-related transaction costs | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | YoY Change | Q1 2025 (Non-GAAP) | | :-------------------------------- | :------------- | :------------- | :--------- | :----------------- | | Revenues | $3.87 billion | $3.43 billion | +12.7% | - | | Net Income | $240.7 million | $197.1 million | +22.1% | $247.6 million | | Diluted EPS | $5.26 | $4.17 | +26.1% | $5.41 | - Q1 2025 net income included **$9.4 million ($6.9 million after taxes)** in transaction-related costs from the Miller Electric Company acquisition[2](index=2&type=chunk) [Operating Performance and Margins](index=1&type=section&id=Operating%20Performance%20and%20Margins) Operating income and margin improved significantly in Q1 2025 on both GAAP and non-GAAP bases, reflecting strong operational execution | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | YoY Change | Q1 2025 (Non-GAAP) | | :-------------------------------- | :------------- | :------------- | :--------- | :----------------- | | Operating Income | $318.8 million | $260.0 million | +22.6% | $328.1 million | | Operating Margin | 8.2% | 7.6% | +0.6 pp | 8.5% | | SG&A Expenses | $404.0 million | $329.4 million | +22.6% | - | | SG&A as % of Revenues | 10.4% | 9.6% | +0.8 pp | - | | Income Tax Rate | 25.8% | 26.4% | -0.6 pp | - | - Operating income for Q1 2025 included depreciation and amortization expense of **$41.9 million**, up from $29.6 million in Q1 2024[3](index=3&type=chunk) [Remaining Performance Obligations (RPOs)](index=2&type=section&id=Remaining%20Performance%20Obligations%20(RPOs)) EMCOR achieved record remaining performance obligations (RPOs) of $11.75 billion as of March 31, 2025, representing a substantial year-over-year increase | Metric | As of March 31, 2025 | As of March 31, 2024 | YoY Change | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Total RPOs | $11.75 billion | $9.18 billion | +28.1% | | RPOs from Miller Electric | $1.0 billion | - | - | - Significant RPO growth was seen in Network and Communications, Healthcare, Manufacturing and Industrial, Hospitality and Entertainment, and Institutional sectors[7](index=7&type=chunk) - Reductions in RPOs within High-Tech Manufacturing and Commercial market sectors were due to progress on construction projects[7](index=7&type=chunk) [Segment-Specific Performance](index=2&type=section&id=Segment-Specific%20Performance) U.S. Electrical and Mechanical Construction segments drove revenue and operating income growth, with Miller Electric significantly contributing to the former Q1 2025 Segment Revenues (YoY Change) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | YoY Change | | :------------------------------------------ | :-------------- | :-------------- | :--------- | | U.S. Electrical Construction & Facilities Services | $1,087.8 million | $764.7 million | +42.3% | | U.S. Mechanical Construction & Facilities Services | $1,572.6 million | $1,427.7 million | +10.2% | | U.S. Building Services | $742.6 million | $781.2 million | -4.9% | | U.S. Industrial Services | $359.0 million | $354.1 million | +1.4% | | U.K. Building Services | $105.3 million | $104.7 million | +0.6% | Q1 2025 Segment Operating Income and Margin | Segment | Q1 2025 Operating Income | Q1 2025 Operating Margin | | :------------------------------------------ | :----------------------- | :----------------------- | | U.S. Electrical Construction & Facilities Services | $136.1 million | 12.5% | | U.S. Mechanical Construction & Facilities Services | $186.7 million | 11.9% | | U.S. Building Services | $36.4 million | 4.9% | | U.S. Industrial Services | $6.8 million | 1.9% | | U.K. Building Services | $5.0 million | 4.7% | - The acquisition of Miller Electric contributed **$183 million in revenues** to the U.S. Electrical Construction segment during the quarter[8](index=8&type=chunk) [Full-Year 2025 Guidance](index=2&type=section&id=Full-Year%202025%20Guidance) This section outlines EMCOR's reaffirmed full-year revenue guidance and narrowed non-GAAP diluted EPS range, reflecting confidence in future performance [2025 Outlook and Reaffirmations](index=2&type=section&id=2025%20Outlook%20and%20Reaffirmations) EMCOR reaffirmed its full-year 2025 revenue guidance range and narrowed its non-GAAP diluted EPS guidance range, reflecting confidence in execution Full-Year 2025 Guidance | Metric | Current Guidance (4/30/25) | Previous Guidance (2/26/25) | | :-------------------- | :------------------------- | :------------------------- | | Revenues | $16.1 billion - $16.9 billion | $16.1 billion - $16.9 billion | | Operating Margin | 8.5% - 9.2% | 8.5% - 9.2% | | Non-GAAP Diluted EPS* | $22.65 - $24.00 | $22.25 - $24.00 | - The guidance reflects confidence in the company's ability to execute with efficiency and discipline, considering potential impacts of tariffs and macroeconomic factors[10](index=10&type=chunk) - The company remains well positioned with a significant year-over-year increase in RPOs and a healthy project pipeline[10](index=10&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) This section presents the CEO's insights on strong Q1 performance, strategic drivers, successful acquisitions, and future segment expectations [CEO's Remarks on Performance and Strategy](index=2&type=section&id=CEO's%20Remarks%20on%20Performance%20and%20Strategy) CEO Tony Guzzi highlighted the continued strength of the business, driven by U.S. Electrical and Mechanical Construction segments, successful execution, and strategic expansion - Results were driven by U.S. Electrical Construction and U.S. Mechanical Construction segments, with year-over-year revenue growth of **42.3%** and **10.2%**, respectively[8](index=8&type=chunk) - Performance reflects customer confidence, proactive expansion into new geographies, and productivity from virtual design and construction technologies and prefabrication capabilities[8](index=8&type=chunk) - The integration of Miller Electric is on track, contributing **$183 million in revenues** to the U.S. Electrical Construction segment[8](index=8&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section provides the condensed consolidated statements of operations, balance sheets, and cash flows for Q1 2025, detailing financial position and performance [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations show a significant increase in revenues, gross profit, and operating income for Q1 2025 compared to Q1 2024 Condensed Consolidated Statements of Operations (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | | Revenues | $3,867,372 | $3,432,276 | | Cost of sales | $3,144,654 | $2,842,967 | | Gross profit | $722,718 | $589,309 | | Selling, general and administrative expenses | $403,962 | $329,356 | | Operating income | $318,756 | $259,953 | | Income before income taxes | $324,197 | $267,716 | | Net income | $240,677 | $197,149 | | Diluted earnings per common share | $5.26 | $4.17 | | Dividends declared per common share | $0.25 | $0.18 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows an increase in total assets, primarily driven by higher accounts receivable, goodwill, and identifiable intangible assets Condensed Consolidated Balance Sheets (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :---------------------------- | :----------------------------- | | Total current assets | $4,910,984 | $5,389,189 | | Goodwill | $1,336,557 | $1,018,415 | | Identifiable intangible assets, net | $1,096,817 | $648,180 | | Total assets | $8,078,872 | $7,716,473 | | Total current liabilities | $4,222,262 | $4,153,863 | | Borrowings under revolving credit facility | $250,000 | $0 | | Total liabilities | $5,126,944 | $4,777,779 | | Total equity | $2,951,928 | $2,938,694 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities decreased in Q1 2025, while investing activities saw a significant net cash outflow due to business acquisitions Condensed Consolidated Statements of Cash Flows (Q1 2025 vs. Q1 2024) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | | Net cash provided by operating activities | $108,471 | $132,264 | | Net cash used in investing activities | $(875,441) | $(19,439) | | Net cash used in financing activities | $(829) | $(58,948) | | (Decrease) increase in cash, cash equivalents, and restricted cash | $(762,930) | $52,737 | | Cash, cash equivalents, and restricted cash at end of period | $577,465 | $842,487 | - Payments for acquisitions of businesses, net of cash acquired, totaled **$850.6 million** in Q1 2025[21](index=21&type=chunk) - Repurchases of common stock amounted to **$224.8 million** in Q1 2025[21](index=21&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section reconciles non-GAAP financial measures, including organic revenue growth, operating income, net income, and diluted EPS, to their GAAP equivalents [Organic Revenue Growth Reconciliation](index=8&type=section&id=Organic%20Revenue%20Growth%20Reconciliation) EMCOR provides a reconciliation of organic revenue growth, a non-GAAP measure, to total GAAP revenue growth, illustrating the impact of acquisitions on overall revenue expansion Organic Revenue Growth Reconciliation (Q1 2025) | Metric | Amount (in thousands) | Percentage | | :-------------------------------- | :-------------------- | :--------- | | GAAP revenue growth | $435,096 | 12.7% | | Incremental revenues from acquisitions | $(250,900) | (7.3)% | | Organic revenue growth (non-GAAP) | $184,196 | 5.4% | [Non-GAAP Operating Income, Net Income, and Diluted EPS Reconciliation](index=10&type=section&id=Non-GAAP%20Operating%20Income%2C%20Net%20Income%2C%20and%20Diluted%20EPS%20Reconciliation) Reconciliations are provided for non-GAAP operating income, net income, and diluted EPS, adjusting for transaction expenses related to the Miller Electric acquisition Non-GAAP Operating Income Reconciliation (Q1 2025) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :------------------------------------------------ | :--------------------- | :--------------------- | | GAAP operating income | $318,756 | $259,953 | | Transaction expenses related to Miller Electric acquisition | $9,353 | - | | Non-GAAP operating income | $328,109 | $259,953 | Non-GAAP Net Income Reconciliation (Q1 2025) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :------------------------------------------------ | :--------------------- | :--------------------- | | GAAP net income | $240,677 | $197,149 | | Transaction expenses related to Miller Electric acquisition | $9,353 | - | | Tax effect of transaction expenses | $(2,410) | - | | Non-GAAP net income | $247,620 | $197,149 | Non-GAAP Diluted EPS Reconciliation (Q1 2025) | Metric | Q1 2025 | Q1 2024 | | :------------------------------------------------ | :------ | :------ | | GAAP diluted earnings per common share | $5.26 | $4.17 | | Transaction expenses related to Miller Electric acquisition | $0.20 | - | | Tax effect of transaction expenses | $(0.05) | - | | Non-GAAP diluted earnings per common share | $5.41 | $4.17 | [Additional Information](index=3&type=section&id=Additional%20Information) This section offers an overview of EMCOR Group, Inc., along with important disclaimers regarding forward-looking statements and the use of non-GAAP financial measures [About EMCOR](index=3&type=section&id=About%20EMCOR) EMCOR Group, Inc. is a Fortune 500 company specializing in mechanical and electrical construction services, industrial and energy infrastructure, and building services - EMCOR Group, Inc. is a Fortune 500 leader in mechanical and electrical construction services, industrial and energy infrastructure, and building services[12](index=12&type=chunk) [Forward-Looking Statements & Non-GAAP Disclosure](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Non-GAAP%20Disclosure) This section provides standard disclaimers regarding forward-looking statements, outlining risks and uncertainties, and explains the use of non-GAAP financial measures - Forward-looking statements include anticipated future operating and financial performance, financial guidance, impact of RPOs, timing of projects, and financial impact of acquisitions[13](index=13&type=chunk) - Risks and uncertainties include adverse economic conditions, market changes, labor scarcity, supply chain disruptions, inflation, regulatory impacts, and increased competition[13](index=13&type=chunk) - Non-GAAP measures are used as key performance indicators for internal evaluation and to provide useful information to investors, but are not GAAP substitutes and may not be comparable to other companies' calculations[14](index=14&type=chunk)

Financial Data and Key Metrics Changes - The company reported revenues of $3,870,000,000, reflecting a year-over-year growth of 12.7% [4][14] - Operating income was $318,800,000 with an operating margin of 8.2%, and diluted earnings per share increased by 26% to $5.26 [5][19] - Non-GAAP adjusted operating income was $328,100,000, or 8.5% of revenues, with non-GAAP adjusted diluted earnings per share of $5.41, representing a 29.7% increase [5][27] - Remaining performance obligations (RPOs) grew to $11,800,000,000, a 17.1% organic increase year-over-year, and a 28.1% increase including Miller Electric [10][11] Business Line Data and Key Metrics Changes - Electrical Construction segment revenues increased by 42% year-over-year, while Mechanical Construction segment revenues grew by 10.2% [5][15] - The Electrical Construction segment generated $1,090,000,000 in revenues, driven by data center projects and healthcare [15][20] - The Mechanical Construction segment reported revenues of $1,570,000,000, with significant growth in data centers and healthcare [15][16] - U.S. Building Services revenues decreased by 4.9% to $742,600,000, primarily due to reduced site-based revenues [17][18] - Industrial Services revenues increased by 1.4% to $359,000,000, impacted by a slower start to the turnaround season [18][24] Market Data and Key Metrics Changes - RPOs in networking communications (data centers) reached $3,600,000,000, up 112% year-over-year [11] - Healthcare RPOs increased by 38% year-over-year to $1,500,000,000, with Miller Electric contributing significantly [12] - Manufacturing and industrial RPOs grew by 31% year-over-year to $1,100,000,000 [12] - Hospitality and entertainment RPOs more than doubled year-over-year to $437,000,000 [12] Company Strategy and Development Direction - The company plans to continue focusing on mechanical services within the Building Services segment, aiming for an 80/20 split between mechanical and site-based services [58] - The integration of Miller Electric is on track, enhancing capabilities and expanding market opportunities [6][10] - The company is optimistic about managing tariff uncertainties and expects to pass on price increases to protect margins [30][31] - The company emphasizes continuous training and sharing best practices to navigate a volatile environment [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for services, as reflected in the growth of RPOs [31] - The company anticipates that the normalization of trade barriers will positively impact operations in the long term [31] - Management highlighted the importance of maintaining operating margins and managing costs effectively throughout the year [34] Other Important Information - The company reported a cash balance of just under $577,000,000, with $250,000,000 borrowed for working capital needs [28] - Operating cash flow was $108,500,000, down from $132,300,000 in the previous year, but still considered strong for Q1 [28][64] Q&A Session Summary Question: What are the operational risks related to tariffs or supply chain noise? - Management indicated that the guidance was more related to macroeconomic uncertainties rather than growth-related issues [40][42] Question: What is the outlook for high-tech manufacturing opportunities? - Management expressed optimism about growth in the pharma and semiconductor sectors, driven by reshoring trends [46][48] Question: How is Miller Electric impacting the Electrical segment margin? - Miller Electric is currently dilutive to the margin due to intangible asset amortization, but margins are expected to normalize over time [52] Question: What are the growth prospects for the data center business? - The company has seen increased demand for power and is expanding into more markets, with a balanced growth approach between existing and new markets [97][98] Question: How does the RPO growth compare to revenue growth guidance? - The RPO growth includes a higher percentage of long-term projects, with a mix of construction and mechanical services driving the growth [90][92]

Financial Data and Key Metrics Changes - The company reported revenues of $3,870,000,000, reflecting a year-over-year growth of 12.7% [5][15] - Operating income was $318,800,000 with an operating margin of 8.2%, and diluted earnings per share were $5.26, representing a 26% increase from the first quarter of 2024 [6][20] - Non-GAAP adjusted operating income was $328,100,000 or 8.5% of revenues, with non-GAAP adjusted diluted earnings per share of $5.41, an increase of 29.7% [6][27] Business Line Data and Key Metrics Changes - Electrical Construction segment revenues increased by 42% year-over-year, while Mechanical Construction segment revenues grew by 10.2% [6][16] - The Electrical Construction segment generated $1,090,000,000 in revenues, driven by data center projects and healthcare [16][21] - Mechanical Construction revenues were $1,570,000,000, with significant growth in data centers and healthcare [17][21] Market Data and Key Metrics Changes - Remaining Performance Obligations (RPOs) grew to $11,800,000,000, a 17.1% organic increase year-over-year, and a 28.1% increase including Miller Electric [11][12] - RPOs in networking communications (data centers) reached $3,600,000,000, up nearly 112% year-over-year [12][13] - Healthcare RPOs increased by 38% year-over-year to $1,500,000,000, with Miller contributing significantly [13] Company Strategy and Development Direction - The company plans to continue focusing on mechanical services, shifting the revenue mix from site-based services to mechanical services [62] - The integration of Miller Electric is on track, enhancing capabilities in key market sectors [8][11] - The company aims to manage tariff uncertainties and supply chain disruptions proactively while maintaining strong operating margins [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's growth prospects despite macroeconomic uncertainties, emphasizing strong demand reflected in RPOs [32][34] - The company anticipates continued growth in high-tech manufacturing, particularly in pharmaceuticals and semiconductors, driven by reshoring trends [47][51] - Management highlighted the importance of maintaining operational discipline and cost management to navigate potential challenges [34][65] Other Important Information - The company reported a cash balance of just under $577,000,000 after the Miller Electric acquisition and share repurchases [28] - Operating cash flow was $108,500,000, down from $132,300,000 in the previous year, but still strong for the first quarter [28][66] Q&A Session Summary Question: Clarification on guidance range and operational risks - Management indicated that the guidance range reflects macroeconomic uncertainties rather than growth-related concerns, with confidence in maintaining margins [41][44] Question: Opportunities in high-tech manufacturing - Management expressed optimism about growth in pharmaceuticals and semiconductors, anticipating increased spending in the coming years [47][51] Question: Impact of Miller Electric on Electrical segment margins - It was noted that Miller Electric is currently dilutive to margins due to intangible asset amortization, but strong margins are expected once this is excluded [53] Question: Future direction of Building Services segment - The focus will be on mechanical services, with a shift in revenue mix expected to favor this area significantly [61][62] Question: Data center business growth sources - Growth has primarily been organic, with a balanced contribution from existing and new markets [102] Question: EPS guidance and contributing factors - Guidance considers the impact of Miller and transaction expenses, with a wide range due to macroeconomic uncertainties [75][76]

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]

Core Insights - The article emphasizes the importance of investing in growth and momentum stocks that are reasonably priced and have the potential to outperform the market over the long term [1] - It highlights David's successful investment strategy, which involved advising investors to buy at the bottom of the financial crisis in March 2009, leading to significant market gains [1] Investment Strategy - David focuses on high-quality growth stocks and employs options as part of his investment strategy [1] - The S&P 500 saw an increase of 367% and the Nasdaq increased by 685% from 2009 to 2019, showcasing the effectiveness of his investment approach [1] Investor Guidance - The article aims to assist investors in making money through strategic investments in quality stocks [1]

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]