10-QPeriod: Q1 FY2024

EMCOR Group, Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 25, 2024For Securities:EME

Summary

EMCOR Group, Inc. reported a strong first quarter for 2024, with revenues reaching a record $3.43 billion, an 18.7% increase year-over-year. This growth was driven by robust demand across most of its market sectors, particularly in its U.S. construction segments, which saw significant revenue increases. The company also achieved record operating income and operating margin, with operating income surging by $105 million to $260 million, representing 7.6% of revenues, up from 5.4% in the prior year period. Net income also saw substantial improvement, reaching $197.1 million, or $4.17 per diluted share, compared to $111.5 million, or $2.32 per diluted share, in the first quarter of 2023. This enhanced profitability is attributed to better project execution, a favorable revenue mix, and operational efficiencies. The company continues to execute its growth strategy through strategic acquisitions, with four new companies expected to close in the coming months, further bolstering its service offerings in key segments. EMCOR's strong financial performance and strategic initiatives position it well for continued growth and value creation for shareholders.

Financial Highlights

46 data points
Beta

Revenue

$3.43B

17.2% Gross Margin

Net Income

$197.15M

5.7% Net Margin

EPS (Diluted)

$4.17

Total Assets

$6.69B

Cash & Equivalents

$840.99M

Free Cash Flow

$132.26M

Financial Statements
Beta
Revenue$3.43B
Cost of Revenue$2.84B
Gross Profit$589.31M
SG&A Expenses$329.36M
Operating Income$259.95M
Net Income$197.15M
EPS (Basic)$4.18
EPS (Diluted)$4.17
Shares Outstanding (Basic)47.14M
Shares Outstanding (Diluted)47.32M

Key Highlights

  • 1Record first quarter revenues of $3.43 billion, up 18.7% year-over-year.
  • 2Record operating income of $260 million and operating margin of 7.6%, a significant improvement from 5.4% in Q1 2023.
  • 3Net income increased to $197.1 million, with diluted EPS rising to $4.17 from $2.32 in the prior year period.
  • 4Strong revenue growth across most segments, especially U.S. Electrical and Mechanical Construction, driven by data center, high-tech manufacturing, and other key sectors.
  • 5Significant increase in backlog with remaining performance obligations totaling $9.18 billion, up from $8.85 billion at the end of 2023.
  • 6Company announced an increase in its quarterly dividend to $0.25 per share, starting with the April 30, 2024 payment.
  • 7Active acquisition strategy with four new companies under definitive agreements, further expanding service capabilities.

Frequently Asked Questions

EMCOR reported record first quarter revenues of $3.43 billion, an increase of 18.7% compared to $2.89 billion in the same period last year. This growth was driven by strong demand across most of its market sectors, with notable increases in its U.S. Electrical and Mechanical Construction and Facilities Services segments.

Profitability significantly improved, with operating income reaching a record $260 million (7.6% of revenues) in Q1 2024, up from $154.9 million (5.4% of revenues) in Q1 2023. Net income also saw a substantial rise to $197.1 million, resulting in diluted earnings per share of $4.17, up from $2.32 in the prior year.

EMCOR's backlog, represented by remaining performance obligations, stands at a robust $9.18 billion as of March 31, 2024, an increase from $8.85 billion at the end of 2023. This substantial backlog indicates strong future revenue potential, particularly in the network and communications sector driven by data center projects.

EMCOR is focused on converting operating income into cash to fund growth through acquisitions and capital expenditures, meet contractual commitments, and return value to shareholders. The company demonstrated its commitment to shareholder returns by announcing an increase in its quarterly dividend to $0.25 per share. Additionally, it continues to actively repurchase its common stock under its authorized program.