A Look Back at Engineering and Design Services Stocks' Q1 Earnings: Sterling (NASDAQ:STRL) Vs The Rest Of The Pack

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how engineering and design services stocks fared in Q1, starting with Sterling (NASDAQ:STRL).

Companies providing engineering and design services boast ever-evolving technical expertise. Compared to their counterparts who manufacture and sell physical products, these companies can also pivot faster to more trending areas due to their smaller physical asset bases. Green energy and water conservation, for example, are current themes driving incremental demand in this space. On the other hand, those providing engineering and design services are 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 5 engineering and design services stocks we track reported a very strong Q1; on average, revenues beat analyst consensus estimates by 4.6%. while next quarter's revenue guidance was 1.9% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but engineering and design services stocks have shown resilience, with share prices up 8.9% on average since the previous earnings results.

Sterling (NASDAQ:STRL) Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ:STRL) provides civil infrastructure construction.

Sterling reported revenues of $440.4 million, up 9.1% year on year, topping analysts' expectations by 4.4%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings estimates and a solid beat of analysts' operating margin estimates.

"We had a great start to the year, growing revenue 9%, driving gross margins to a new first quarter high of 17.5%, and delivering EPS of $1.00. This was achieved despite the challenging weather in January and February. Had the weather cooperated, the quarter would have been even better," stated Joe Cutillo, Sterling's Chief Executive Officer.

The stock is up 12.7% since the results and currently trades at $118.77.

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Best Q1: Dycom (NYSE:DY) Modern internet and phone connectivity is thanks to companies like Dycom (NYSE:DY), who provide infrastructure, telecommunications, and utility contracting services.

Dycom reported revenues of $1.14 billion, up 9.3% year on year, outperforming analysts' expectations by 4.5%. It was an incredible quarter for the company, with an impressive beat of analysts' earnings estimates.

The stock is up 10.3% since the results and currently trades at $170.33.

Weakest Q1: AECOM (NYSE:ACM) Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE:ACM) provides various infrastructure consulting services.

AECOM reported revenues of $3.94 billion, up 13% year on year, exceeding analysts' expectations by 5.5%. It was a mixed quarter for the company. Its operating margin missed and its EPS fell short of Wall Street's estimates.

The stock is down 7.7% since the results and currently trades at $88.89.

MasTec (NYSE:MTZ) Involved in the 1996 Olympic Games MasTec (NYSE:MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

MasTec reported revenues of $2.69 billion, up 4% year on year, surpassing analysts' expectations by 2.5%. It was an ok quarter for the company, with an impressive beat of analysts' operating margin estimates but a miss of analysts' earnings estimates.

MasTec had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update among its peers. The stock is up 19.9% since the results and currently trades at $109.26.

EMCOR (NYSE:EME) Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services

EMCOR reported revenues of $3.43 billion, up 18.7% year on year, surpassing analysts' expectations by 6.4%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings estimates.

EMCOR scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 9.4% since the results and currently trades at $370.38.