Construction and Maintenance Services Stocks Q2 Highlights: Primoris (NYSE:PRIM)

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 Primoris (NYSE:PRIM).

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.

Luckily, construction and maintenance services stocks have performed well with share prices up 11.5% on average since the latest earnings results.

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 print exceeded analysts’ expectations by 2.1%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ operating margin and earnings estimates.

“Primoris delivered another excellent quarter achieving solid revenue growth and improved profitability,” said Tom McCormick, President and Chief Executive Officer of Primoris.

Interestingly, the stock is up 27.5% since reporting and currently trades at $61.23.

Is now the time to buy Primoris? Access our full analysis of the earnings results 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 44.4% since reporting. It currently trades at $11.70.

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

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, falling short of analysts’ expectations by 3.4%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

As expected, the stock is down 43.4% since the results and currently trades at $6.25.

Read our full analysis of Orion’s results here.

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 $828.9 million, down 6.7% year on year. This print lagged analysts' expectations by 5.4%. It was a slower quarter as it also recorded a miss of analysts’ earnings estimates.

The stock is down 16.1% since reporting and currently trades at $117.33.

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

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 $1.08 billion, up 20.5% year on year. This result surpassed analysts’ expectations by 7.3%. It was an exceptional quarter as it also put up an impressive beat of analysts’ operating margin and earnings estimates.

Granite Construction achieved the biggest analyst estimates beat among its peers. The stock is up 19.7% since reporting and currently trades at $81.82.

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

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