Winners And Losers Of Q2: Granite Construction (NYSE:GVA) Vs The Rest Of The Construction and Maintenance Services Stocks

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 Granite Construction (NYSE:GVA).

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.

Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, construction and maintenance services stocks have held steady amidst all this with share prices up 3.1% on average since the latest earnings results.

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 print exceeded analysts’ expectations by 7.3%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ operating margin and earnings estimates.

“I am pleased with our strong second quarter,” said Kyle Larkin, Granite President and Chief Executive Officer.

Granite Construction achieved the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 11.7% since reporting and currently trades at $76.37.

Is now the time to buy Granite Construction? 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 20.4% since reporting. It currently trades at $9.75.

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 45.2% since the results and currently trades at $6.06.

Read our full analysis of Orion’s results here.

Matrix Service (NASDAQ:MTRX)

Founded in Oklahoma, Matrix Service (NASDAQ:MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.

Matrix Service reported revenues of $189.5 million, down 7.9% year on year. This number came in 6.6% below analysts' expectations. Taking a step back, it was still an exceptional quarter as it recorded full-year revenue guidance exceeding analysts’ expectations and an impressive beat of analysts’ earnings estimates.

Matrix Service achieved the highest full-year guidance raise among its peers. The stock is up 19.9% since reporting and currently trades at $10.96.

Read our full, actionable report on Matrix Service here, it’s free.

APi (NYSE:APG)

Started in 1926 as an insulation contractor, APi (NYSE:APG) provides life safety solutions and specialty services for buildings and infrastructure.

APi reported revenues of $1.73 billion, down 2.3% year on year. This print missed analysts’ expectations by 3.3%. Overall, it was a slower quarter as it also produced a miss of analysts’ organic revenue estimates and underwhelming EBITDA guidance for the full year.

The stock is down 9% since reporting and currently trades at $34.47.

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

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