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EMCOR Posts Preliminary Q1 Results, Withdraws 2020 Guidance

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EMCOR Group, Inc. EME has come up with preliminary first-quarter 2020 results and withdrawn its previously announced guidance for full-year 2020, in response to the ongoing impact of COVID-19 on business and the economy.

The company is likely to generate first-quarter 2020 revenues of $2.3 billion, indicating a 6.5% year-over-year increase. The Zacks Consensus Estimate for the said metric is also pegged at $2.3 billion. The potential increase can be attributable to strength across the business, led by double-digit growth in both the U.S. mechanical construction and the U.S. industrial services segments.

It expects earnings for the quarter to be $1.35 per share, suggesting a 5.5% increase from the year-ago period. The consensus mark for the said metric is pegged at $1.29 per share. It is to be noted that EMCOR’s first-quarter 2020 results are set to be announced on Apr 30.

Notably, the company stated that it has been bidding and booking work amid the challenging environment. EMCOR is currently operating at 70-80% of its capacity. However, in some areas where the company has been designated as essential for the economy, it is working at or near full capacity.

Notably, the company has undertaken certain short-term cost reductions in the wake of the abrupt drop in activity due to COVID-19. Also, it remains confident about maintaining a strong and liquid balance sheet. The company believes that it is well positioned to continue serving the markets and customers until the situation normalizes.

Shares of the company, which currently sports a Zacks Rank #1 (Strong Buy), have declined 29.2% so far this year compared with the industry’s 42.2% fall. The current market disruption, which is indicative of economic slowdown, is weighing on investors’ sentiments. Nonetheless, the company’s core U.S. Construction segment, accretive acquisitions and strengthening infrastructure-related services business will likely overcome the uncertainties. You can see the complete list of today’s Zacks #1 Rank stocks here.

Similar to EMCOR, North American Construction Group Ltd. or NACG NOA also withdrew its guidance for 2020. The company noted that its clients are currently experiencing negative and wide-ranging impact of shutdowns. These headwinds are likely to put pressure on the company’s full-year results.

Although other market players like MasTec, Inc. MTZ and Dycom Industries, Inc. DY didn’t provided any update on their respective businesses, the current market scenario is likely to weigh on the overall industry in the future.

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EMCOR Group, Inc. (EME) : Free Stock Analysis Report
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