EMCOR Group Earnings: Here’s Why Investors are Not Excited Now

EMCOR Group Inc. (NYSE:EME) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 4%.

EMCOR Group Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 2.04% to $0.48 in the quarter versus EPS of $0.49 in the year-earlier quarter.

Revenue: Decreased 2.14% to $1.56 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: EMCOR Group Inc. reported adjusted EPS income of $0.48 per share. By that measure, the company missed the mean analyst estimate of $0.53. It missed the average revenue estimate of $1.63 billion.

Quoting Management: Tony Guzzi, President and Chief Executive Officer of EMCOR Group commented, “This was a transformational quarter for the Company. We made significant progress toward our strategic goals with the announcement of a major acquisition in RepconStrickland and the decision to withdraw from the UK construction market and focus only on facilities services there. Domestically, electrical construction continued to demonstrate strong growth and facilities services generated solid margin contribution growth driven by better performance from our mechanical and site-based services business. This performance was offset by losses incurred by one of our subsidiaries located in the southeastern U.S. within our U.S. mechanical construction and facilities services segment. Additionally, the impact of sequestration on our government-related business has had a greater negative effect than we originally anticipated. Aside from those issues, we are pleased with the underlying performance of our businesses, which was in-line with our expectations and bodes well for the future.”

Key Stats (on next page)…

Revenue decreased 0.79% from $1.57 billion in the previous quarter. EPS increased 9.09% from $0.44 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.63 and has not changed. For the current year, the average estimate has moved up from a profit of $2.33 to a profit of $2.36 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)