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 engineering and design services stocks, starting with AECOM (NYSE:ACM).
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 4 engineering and design services stocks we track reported a very strong Q1; on average, revenues beat analyst consensus estimates by 4.7%. 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 7.1% on average since the previous earnings results.
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%. Overall, it was a very strong quarter for the company.
“We delivered strong second quarter and first half financial performance, and as a result we are increasing the mid-point of our adjusted EBITDA guidance for the full year,” said Troy Rudd, AECOM’s chief executive officer.
The stock is down 9.9% since reporting and currently trades at $86.80.
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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 market seems happy with the results as the stock is up 13.1% since reporting. It currently trades at $174.74.
Slowest Q1: 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, exceeding analysts' expectations by 2.5%. It was a slower quarter for the company with a miss of analysts' earnings and backlog sales estimates.
MasTec had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. Interestingly, the stock is up 14.1% since the results and currently trades at $103.91.
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%. More broadly, it was a stunning quarter for the company with an impressive beat of analysts' earnings estimates and full-year revenue guidance exceeding analysts' expectations.
EMCOR achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 11% since reporting and currently trades at $376.
This content was originally published on Stock Story
