A Look Back at Construction and Maintenance Services Stocks’ Q2 Earnings: Orion (NYSE:ORN) Vs The Rest Of The Pack

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how construction and maintenance services stocks fared in Q2, starting with Orion (NYSE:ORN).

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 13 construction and maintenance services stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 2% below.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

Thankfully, construction and maintenance services stocks have been resilient with share prices up 9.1% on average since the latest earnings results.

Weakest Q2: Orion (NYSE:ORN)

Established in 1994, Orion (NYSE:ORN) provides construction services for marine infrastructure and industrial projects.

Orion reported revenues of $192.2 million, up 5.3% year on year. This print fell short of analysts’ expectations by 3.4%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.

“In the second quarter, we generated revenue of $192.2 million and Adjusted EBITDA of $5.5 million. As previously indicated, we anticipated a slower ramp up with two large projects.” said Travis Boone, Chief Executive Officer of Orion Group Holdings, Inc.

Unsurprisingly, the stock is down 45.6% since reporting and currently trades at $6.01.

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

Best Q2: Great Lakes Dredge & Dock (NASDAQ:GLDD)

Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ:GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.

Great Lakes Dredge & Dock reported revenues of $170.1 million, up 28.2% year on year, outperforming analysts’ expectations by 3.5%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.

The market seems happy with the results as the stock is up 33.8% since reporting. It currently trades at $10.84.

Is now the time to buy Great Lakes Dredge & Dock? Access our full analysis of the earnings results here, it’s free.

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 $1.13 billion, up 10.3% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

Interestingly, the stock is up 9.4% since the results and currently trades at $25.94.

Read our full analysis of Tutor Perini’s results here.

Comfort Systems (NYSE:FIX)

Having historically grown through organic means as well as acquisitions of numerous peers and competitors, Comfort Systems USA (NYSE:FIX) provides mechanical and electrical contracting services.

Comfort Systems reported revenues of $1.81 billion, up 39.6% year on year. This number topped analysts’ expectations by 6.9%. It was a strong quarter as it also produced an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.

Comfort Systems delivered the fastest revenue growth among its peers. The stock is up 32.7% since reporting and currently trades at $388.12.

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

Primoris (NYSE:PRIM)

Listed on the NASDAQ in 2008, Primoris (NYSE:PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.

Primoris reported revenues of $1.56 billion, up 10.6% year on year. This result topped analysts’ expectations by 2.1%. It was a strong quarter as it also put up an impressive beat of analysts’ operating margin and earnings estimates.

The stock is up 21.9% since reporting and currently trades at $58.54.

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

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