Summary
EMCOR Group, Inc. (EME) reported its second-quarter 2013 results, showing a decline in revenues and operating income compared to the prior year period. This was primarily driven by underperformance in its United Kingdom construction operations and specific projects within its U.S. mechanical construction segment. The company is undertaking a strategic withdrawal from the U.K. construction market due to persistent losses and unfavorable market conditions, incurring significant restructuring expenses. Despite these headwinds, EMCOR's U.S. electrical and facilities services segments demonstrated improved performance. The company is also actively pursuing growth through acquisitions, notably announcing an agreement to acquire RepconStrickland, Inc., a significant move expected to bolster its position in the refinery and petrochemical services market. Investors should note the impact of these strategic decisions and operational challenges on the current financial results, while also considering the potential benefits from future growth initiatives.
Financial Highlights
50 data points| Revenue | $1.53B |
| Cost of Revenue | $1.38B |
| Gross Profit | $186.34M |
| SG&A Expenses | $139.62M |
| Operating Income | $36.10M |
| Interest Expense | $1.76M |
| Net Income | $21.01M |
| EPS (Basic) | $0.31 |
| EPS (Diluted) | $0.31 |
| Shares Outstanding (Basic) | 67.10M |
| Shares Outstanding (Diluted) | 68.10M |
Key Highlights
- 1Total revenues for the three months ended June 30, 2013, decreased by 2.1% to $1.56 billion from $1.59 billion in the prior year period.
- 2Operating income for the three months ended June 30, 2013, declined to $36.1 million, down from $56.3 million in the same period last year, with operating margin falling to 2.3% from 3.5%.
- 3The company incurred $5.8 million in restructuring expenses related to its decision to withdraw from the United Kingdom construction market.
- 4The U.S. mechanical construction and facilities services segment experienced a significant drop in operating income due to losses on two specific projects.
- 5Conversely, the U.S. electrical construction and facilities services segment saw revenue growth, and the U.S. facilities services segment showed improved operating income.
- 6EMCOR announced a definitive agreement to acquire RepconStrickland, Inc. for approximately $455.0 million, expected to close by the end of July 2013.
- 7Backlog increased to $3.51 billion at June 30, 2013, from $3.28 billion at June 30, 2012, driven by U.S. electrical and mechanical construction segments.