The post-pandemic recovery phase is expected to witness an uptick in commodity, infrastructure, and construction businesses. Construction, homebuilding, and other infrastructure stocks are, therefore, in focus. The Emcor Group is one of the largest construction companies in the US. It has operations in 170 locations and does business in the US as well as the UK markets. Emcor Group is also listed in the Fortune 500 list. Emcor was founded back in 1994 and has, over the years, made a series of acquisitions to broaden its service offerings. Today, it does electrical construction work, mechanical construction, facilities service, as well as energy and industrial infrastructure works.
Q3 2020 Earnings Up While Revenues Down
Emcor Group reported its third-quarter FY2020 earnings in October of 2020. Consolidated revenues for the company were down almost 4% at $2.2 billion. The Domestic Construction segment revenues were down 1.6% at $1.4 billion. The US Building Services revenues were up 3.7% at $551 million. US Industrial Services segment revenues, meanwhile, were down a significant 40% at $139 million. Diluted earnings per share dropped from $1.45 per share in Q32019 to $1.11 per share.
Company president Anthony Guzzi said, “we are well positioned with our customers rebound, we have reset the business through aggressive cost-cutting and redeploying personnel to the work that is available. The issue is our field supervision is absorbed and productive. However, they are capable of managing much larger work scopes versus what is available today, and that is where the leverage is in this segment.”
AECOM and Emcor are two of the largest construction businesses in the US. AECOM’s stock has more than doubled over the past 5 years. It has had a similar growth since the March 2020 market crash. The stock almost fell to a 5-year low back in March 2020. Emcor Group’s stock has also doubled over a 5-year period and is up 88% since hitting a low in March 2020.