Q2 Earnings Highs And Lows: MasTec (NYSE:MTZ) Vs The Rest Of The Engineering and Design Services Stocks

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the engineering and design services stocks, including MasTec (NYSE:MTZ) 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 very strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 0.6% above.

Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Luckily, engineering and design services stocks have performed well with share prices up 19.2% on average since the latest earnings results.

Weakest Q2: MasTec (NYSE:MTZ)

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 $2.96 billion, up 3% year on year. This print fell short of analysts’ expectations by 4.2%, but it was still a satisfactory quarter for the company with an impressive beat of analysts’ operating margin estimates but underwhelming EBITDA guidance for the next quarter.

Jose Mas, MasTec's Chief Executive Officer, commented "We are pleased with our solid second quarter performance, and expect to build on this momentum during the balance of 2024 and in 2025. Our record backlog in multiple segments illustrates the confidence our customers have in MasTec to partner on their strategic capital programs. I'd like to highlight that during the second quarter, MasTec was awarded an approximately 700-mile high voltage transmission project that is expected to start in early 2025. We are experiencing significant demand for our services and look forward to continue delivering best in class execution for our customers in a safe, timely and cost-effective manner through the hard work and dedication of the men and women of MasTec."

MasTec delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. Interestingly, the stock is up 17.9% since reporting and currently trades at $125.

Is now the time to buy MasTec? Access our full analysis of the earnings results here, it’s free.

Best Q2: EMCOR (NYSE:EME)

Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services

EMCOR reported revenues of $3.67 billion, up 20.4% year on year, outperforming analysts’ expectations by 3.9%. The business had an exceptional quarter with an impressive beat of analysts’ earnings and operating margin estimates.

EMCOR delivered the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 19.7% since reporting. It currently trades at $426.99.

Is now the time to buy EMCOR? Access our full analysis of the earnings results here, it’s free.

AECOM (NYSE:ACM)

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 $4.15 billion, up 13.3% year on year, exceeding analysts’ expectations by 5.2%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a decent beat of analysts’ operating margin and earnings estimates.

Interestingly, the stock is up 16.6% since the results and currently trades at $101.

Read our full analysis of AECOM’s results here.

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 $1.20 billion, up 15.5% year on year. This number met analysts’ expectations. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.

The stock is down 1.2% since reporting and currently trades at $192.29.

Read our full, actionable report on Dycom here, it’s free.

Sterling (NASDAQ:STRL)

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 $582.8 million, up 11.6% year on year. This result beat analysts’ expectations by 4.1%. Overall, it was a very strong quarter as it also logged optimistic earnings guidance for the full year and a solid beat of analysts’ earnings estimates.

The stock is up 42.1% since reporting and currently trades at $145.99.

Read our full, actionable report on Sterling here, it’s free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.