EMCOR Group (EME) Tops Q1 EPS by 19c, Revenues Beat; Raises FY19 EPS/Revenue Guidance

EMCOR Group (NYSE: EME) reported Q1 EPS of $1.28, $0.19 better than the analyst estimate of $1.09. Revenue for the quarter came in at $2.16 billion versus the consensus estimate of $1.99 billion.

• Record First Quarter Revenues of $2.16 billion, 13.6% Increase Year-over-Year
• Record First Quarter Diluted EPS from Cont. Operations of $1.28, 36.2% Increase Year-over-Year
• Total Remaining Performance Obligations of $4.16 billion, 15.3% Increase Year-over-Year
• Increases 2019 Revenue Guidance Range to $8.5-$8.6 billion from $8.3-$8.4 billion
• Increases 2019 Diluted EPS Guidance Range to $5.00-$5.50 from $4.70-$5.40

Tony Guzzi, Chairman, President and Chief Executive Officer of EMCOR, commented, “The Company reported record first quarter revenues, operating income, operating margin, net income attributable to EMCOR and diluted earnings per share from continuing operations, building upon our strong momentum in 2018. We delivered a 13.6% year-over-year increase in revenues, 11.0% of which was organic, driven by strength in each of our segments, including double-digit growth in our U.S. Electrical Construction, U.S. Building Services and U.S. Industrial Services segments. Consistent execution across our business drove operating income growth of 31.2% year-over-year and 60 basis points of operating margin expansion. Additionally, remaining performance obligations increased 15.3% year-over-year and 4.9% sequentially, underscoring the value proposition of our services portfolio and the strength we are seeing in the geographies and end markets in which we operate.”

Mr. Guzzi added, “Our U.S. Electrical Construction and U.S. Mechanical Construction segments continued to perform exceptionally, posting revenue increases of 16.1% and 9.9% year-over-year, respectively. Our U.S. Electrical Construction segment reported a strong 12.1% organic revenue growth rate, while the segment’s overall growth was further supported by the contribution from a recent acquisition. Strong project execution drove solid operating performance, with our U.S. Construction segments posting a combined 11.2% year-over-year increase in operating income and a very healthy combined operating margin of 6.6%. Despite mild winter conditions, our U.S. Building Services segment recorded double-digit revenue and operating income growth for the first quarter of 2019, driven by broad based strength across their mobile mechanical services and commercial site-based services businesses. Our U.S. Industrial Services segment also had solid performance in the quarter, driven by much improved spring turnaround activity compared to the year ago period, resulting in revenue growth of 29.8% year-over-year and 200 basis points of operating margin expansion. Despite significant foreign exchange headwinds, our U.K. Building Services segment continued to perform well, driven by new customer wins and strong demand for small- to mid-sized project activity.”

Mr. Guzzi concluded, “We are very pleased with our first quarter results and believe our growing and diverse project pipeline positions us well for the remainder of 2019. Our updated guidance reflects our strong first quarter results, as well as our expectation for sustained growth in the non-residential construction market moving forward. Looking ahead and consistent with our strategy, we will continue to leverage our flexible balance sheet to invest in our business and return capital to shareholders through share buybacks and dividends.”

GUIDANCE:

EMCOR Group sees FY2019 EPS of $5.00-$5.50, versus the consensus of $5.27. EMCOR Group sees FY2019 revenue of $8.5-8.6 billion, versus the consensus of $8.36 billion.

For earnings history and earnings-related data on EMCOR Group (EME) click here.

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