Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Granite Construction (NYSE:GVA) and the best and worst performers in the construction and maintenance services industry.
Construction and maintenance services 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, fire escapes need to be inspected every five years–. More recently, services to address energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and maintenance services companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives incremental demand for these companies’ offerings.
The 12 construction and maintenance services stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.
Thankfully, share prices of the companies have been resilient as they are up 5.3% on average since the latest earnings results.
Granite Construction (NYSE:GVA)
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE:GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Granite Construction reported revenues of $1.28 billion, up 14.2% year on year. This print fell short of analysts’ expectations by 0.9%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
"In the third quarter, we continued to build on our momentum with revenue growth and margin expansion,” said Kyle Larkin, Granite President and Chief Executive Officer.
Interestingly, the stock is up 6.9% since reporting and currently trades at $87.71.
Is now the time to buy Granite Construction? Access our full analysis of the earnings results here, it’s free.
Best Q3: Limbach (NASDAQ:LMB)
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Limbach reported revenues of $133.9 million, up 4.8% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Limbach scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 9.1% since reporting. It currently trades at $85.10.
Is now the time to buy Limbach? Access our full analysis of the earnings results here, it’s free.
Slowest Q3: Tutor Perini (NYSE:TPC)
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE:TPC) is a civil and building construction company offering diversified general contracting and design-build services.
Tutor Perini reported revenues of $1.08 billion, up 2.1% year on year, falling short of analysts’ expectations by 7.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
Tutor Perini delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 17% since the results and currently trades at $25.14.
Read our full analysis of Tutor Perini’s results here.
Comfort Systems (NYSE:FIX)
Formed through the merger of 12 companies, Comfort Systems (NYSE:FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $1.81 billion, up 31.5% year on year. This result missed analysts’ expectations by 1.6%. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a miss of analysts’ backlog estimates.
The stock is up 2% since reporting and currently trades at $421.94.
Read our full, actionable report on Comfort Systems here, it’s free.
MYR Group (NASDAQ:MYRG)
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ:MYRG) is a specialty contractor in the electrical construction industry.
MYR Group reported revenues of $888 million, down 5.5% year on year. This print lagged analysts' expectations by 3.2%. Zooming out, it was actually a very strong quarter as it logged an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 28.5% since reporting and currently trades at $148.23.
Read our full, actionable report on MYR Group here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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