Wrapping up Q4 earnings, we look at the numbers and key takeaways for the engineering and design services stocks, including Dycom (NYSE:DY) and its peers.
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 strong Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.7% below.
While some engineering and design services stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.7% since the latest earnings results.
Best Q4: 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 $1.08 billion, up 13.9% year on year. This print exceeded analysts’ expectations by 5.7%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
“Dycom’s strong fourth quarter and fiscal year results reflect the successful execution of our strategy and our ability to meet growing industry demand while sustaining the highest level of quality in our work,” said Dan Peyovich, Dycom’s President and Chief Executive Officer.
Dycom Total Revenue
Dycom pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 9.4% since reporting and currently trades at $155.42.
Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services
EMCOR reported revenues of $3.77 billion, up 9.6% year on year, falling short of analysts’ expectations by 0.6%. However, the business still had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
EMCOR Total Revenue
EMCOR achieved the highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.9% since reporting. It currently trades at $386.56.
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 $4.01 billion, up 2.9% year on year, falling short of analysts’ expectations by 2.3%. It was a mixed quarter as it posted an impressive beat of analysts’ EPS estimates but adjusted operating income in line with analysts’ estimates.
As expected, the stock is down 8.6% since the results and currently trades at $95.
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 $3.40 billion, up 3.8% year on year. This print beat analysts’ expectations by 2.4%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.
The stock is down 4.3% since reporting and currently trades at $121.33.
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 $498.8 million, up 2.6% year on year. This result lagged analysts' expectations by 6.1%. Zooming out, it was actually a strong quarter as it put up full-year EBITDA guidance exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
Sterling had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update among its peers. The stock is up 1.9% since reporting and currently trades at $118.50.
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