As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the construction and maintenance services industry, including Concrete Pumping (NASDAQ:BBCP) and its peers.
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.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Thankfully, construction and maintenance services stocks have been resilient with share prices up 7.4% on average since the latest earnings results.
Concrete Pumping (NASDAQ:BBCP)
Going public via SPAC in 2018, Concrete Pumping (NASDAQ:BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Concrete Pumping reported revenues of $109.6 million, down 9.2% year on year. This print fell short of analysts’ expectations by 12.6%. Overall, it was a disappointing quarter for the company with full-year revenue guidance missing analysts’ expectations.
“In the third quarter, continued organic growth in our U.S. Concrete Waste Management business was offset by a series of factors that impacted volume-driven declines in our U.S. Concrete Pumping segment,” said CPH CEO Bruce Young.
Concrete Pumping 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 1.9% since reporting and currently trades at $5.85.
Read our full report on Concrete Pumping 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 33.2% since reporting. It currently trades at $10.79.
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 49% since the results and currently trades at $5.64.
Read our full analysis of Orion’s results here.
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. This number came in 2% below analysts' expectations. Overall, it was a disappointing quarter as it also logged a miss of analysts’ earnings estimates.
The stock is up 9% since reporting and currently trades at $25.84.
Read our full, actionable report on Tutor Perini 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 number topped analysts’ expectations by 7.3%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ operating margin and earnings estimates.
Granite Construction delivered the biggest analyst estimates beat among its peers. The stock is up 15.7% since reporting and currently trades at $79.11.
Read our full, actionable report on Granite Construction here, it’s free.
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