As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at construction and engineering stocks, starting with Fluor (NYSE:FLR).
Construction and engineering companies not only boast technical know-how in specialized areas but also may hold special licenses and permits. Those who work in more regulated areas can enjoy more predictable revenue streams - for example, sprinkler systems need to be maintained every three years. More recently, services addressing energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and engineering companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives topline performance for these companies.
The 17 construction and engineering stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 0.8%. while next quarter's revenue guidance was 1.9% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, but construction and engineering stocks have performed well, with the share prices up 11.3% on average since the previous earnings results.
Fluor (NYSE:FLR) Founded by Swiss immigrant Simon Fluor with just $100 in 1912, Fluor (NYSE:FLR) provides engineering, construction, and maintenance service to a diverse set of industries.
Fluor reported revenues of $3.73 billion, flat year on year, falling short of analysts' expectations by 6.6%. Overall, it was a slower quarter for the company with a miss of analysts' earnings estimates.
“2024 is off to a good start with substantial new awards from clients in our Urban Solutions segment,” said David Constable, chairman and chief executive officer of Fluor.
The stock is up 16.5% since reporting and currently trades at $48.05.
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Best Q1: Dycom (NYSE:DY) Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE:DY) builds and maintains telecommunications infrastructure.
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 market seems happy with the results as the stock is up 15.9% since reporting. It currently trades at $178.98.
Weakest Q1: Matrix Service (NASDAQ:MTRX) Founded in Oklahoma, Matrix Service Company (NASDAQ: MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Matrix Service reported revenues of $166 million, down 11.2% year on year, falling short of analysts' expectations by 15%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Matrix Service had the weakest performance against analyst estimates in the group. As expected, the stock is down 20.1% since the results and currently trades at $9.47.
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%. Zooming out, it was a slower quarter for the company with a miss of analysts' earnings and backlog sales estimates.
MasTec had the weakest full-year guidance update among its peers. The stock is up 17.2% since reporting and currently trades at $106.73.
WillScot Mobile Mini (NASDAQ:WSC) Originally focusing on mobile offices for construction sites, WillScot (NASDAQ:WSC) provides ready-to-use temporary spaces, largely for longer-term lease.
WillScot Mobile Mini reported revenues of $587.2 million, up 3.8% year on year, surpassing analysts' expectations by 1.1%. Zooming out, it was a slower quarter for the company with underwhelming EBITDA guidance for the full year and a miss of analysts' earnings estimates.
The stock is up 1.8% since reporting and currently trades at $38.29.
This content was originally published on Stock Story
